5 things to consider when calculating your PPC budget 

No matter how much of your marketing budget you may have put aside for PPC, to see the highest ROI (return on investment), you want to  make sure that you’re optimising your advertising strategy so that you can spend smarter not more, and see high conversion rates to prove that whatever you’re doing works.

Here at Embryo, when our PPC team carries out an audit – a deep  dive into your company’s financial performance and expenditure – they’ll leave no stone unturned, analysing everything from how much you spend on ads, to overheads and raw materials, and even to your employee’s salaries.

By knowing exactly how much you spend, you’ll be able to determine how much of that you can realistically allocate to your PPC budget, and how and when to spend it, to get the biggest bang for your buck.

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1. Set your spending sights

illustration for ppc budget and targets

In order to know how you’re going to use your budget, you need to know what you want to achieve with your investment. This might be meeting a specific sales volume each month through your ad revenue, or constructing profit margins for individual PPC conversions.

In order to be successful it’s wise to set PPC goals that reflect the overall marketing strategy of your business as a whole in order to ensure coherency and seamless lead generation to maximum conversions.

A good way of mapping out your budget is by setting out your goals in order to determine how you want that money to be spent. These targets might include:

Boost brand awareness- Increasing interactions and building positive brand associations is a great way to make the most of your budget by increasing the average conversion value you receive in relation to how much you spend on your ads.

Generate quality leads- Attracting high quality leads is more likely to lower your CPC (cost-per-click) and CPA (cost-per-acquisition) because people are drawn to compelling ad content that represents relevant search trends and resonates with emotional triggers and benefits. Not only will your budget thank you, but your satisfied clients will as well.

Increase profit percentages- One of the most significant ways to make the most of your budget in order to see an increase in profit percentages is to be smarter with your bidding strategies and adjustments. Google Ads’ smart or automated bidding optimises ads for a higher conversion value based on when that ad is likely to receive the most engagement.

2. Be realistic about your budget

Although it’s nice to have big dreams for your brand, if you want to make the most out of a limited budget it’s important to have achievable goals and to be realistic about using your budget to reach them.

Amy Phlean, Senior PPC executive on keeping your budget realistic:

senior ppc exec amy phelan

“The basic idea is to calculate how little you can spend in order to see the maximum return investment. In order to carry out an accurate calculation, you’ll need to consider things like expected average order value, cost per acquisition, and CPC on your ads.”

Obviously there are lots of other factors to consider as well, from competitor performance, target audience, campaign length and your overall marketing budget. However, a basic formula for calculating your PPC budget is:

Number of customers or leads needed/ Website conversion rate x average CPC

3. Make (careful) use of priority and negative keywords

google ads keyword planner tool

On Google Ads there is a whole range of tools to help you choose the right targeting and exclusion settings. This means you can better control your ads to be visible to the people who are most likely to be interested in your product.  In constructing a successful ad campaign, you also want to make sure that your ads contain high quality content and optimise placement wherever they’re shown.

Incredibly important for optimising your ads (and subsequently your ad budget) is to bid on the keywords that will generate the most traffic to your site. Priority terms, whilst good for protecting your brand image, could be a waste of your budget if your company already has a high search volume but low competition.

Alternatively, negative keywords can come in useful when buying traffic because it means only your ads come up for that search term, rather than you paying for your competitors’ traffic

4. Assess your progress

Once your PPC ad campaign is live you’ll start to see performance data. This is incredibly important to analyse in order to make well-founded marketing decisions going forward about how effective your budget and PPC strategies are.

Once you have an idea of how your ads are performing in terms of customer data, impressions and conversions, you can use this as a basis to either increase your budget, or to reassess your strategy to determine what’s working well and what you could improve. In order to be smart about your budget, we always recommend trying to optimise your ads first rather than just throwing more money at keywords. Ultimately, if you don’t have a good PPC strategy in place, it doesn’t matter how big your budget is – eventually you’ll find yourself running at a loss.

5. SEO will help you optimise your budget

embryo logoHow Do PPC and SEO Work Together?

If you’re on a limited budget for PPC, one of the easiest ways to make it go further is by incorporating SEO into your PPC strategy. This will allow you to grow your business through organic traffic first, so that you can then work on a strong ad campaign that not only draws in new paid traffic, but which renews the interest of your current customers as well.

By combining these marketing strategies, you can also analyse your top performing ad content and use this to inform marketing decisions and campaigns in the future.

A Smart bid doesn’t mean a smart budget

While Smart bidding is good for automatically increasing your budget spends during periods of optimal customer engagement, if you’re on a limited budget the ease is not necessarily always worth the lack of control you have over your ads display and positionality. Ultimately, it’s important to understand how your PPC ads are performing through data analysis and reviews of customer behaviour so that you can most accurately calculate a PPC budget that will generate the highest ROI specific to your business.

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