Monday, 10 June 2013

How To Set A Budget For Your Business PPC Campaign

There is much more to establishing an effective pay-per-click (PPC) campaign than choosing target keywords. To get the most out of your PPC campaign, you must define a budget that makes sense and then use those available resources in the most productive way.

1. Define Goals

The most important step that the business can take is knowing precisely what its expectations are. Ideally, the business should be able to quantify the expectations in terms of actual sales or a similar metric. If the keyword is "business consulting", then determine how many additional consultations the business plans to achieve by running this PPC campaign. Too many businesses approach this endeavor in an abstract fashion, but in doing so, there's a tendency to waste resources and be unable to refine future efforts.

2. Employ a Test Campaign

The challenge of creating a proper budget for a PPC campaign is that there is a chicken-and-egg scenario: The business requires information that it doesn't have yet. There are Web-based tools available that will help guesstimate these values based on various parameters. Rather than use those guestimates, however, run a small test campaign based on them. Consider the test campaign a cost of doing business, and the information from it can seed a proper budget.

3. Estimate the Conversion Rate

The next step is to assess the conversion rate of the keywords and key phrases that the business intends to use for the PPC campaign. The conversion rate indicates the number of click-throughs required, on average, to convert a sale. For instance, if the conversion rate for search engine referrals on the primary keyword is four percent, then 25 clicks are necessary to convert a single success.

4. Determine the Maximum Cost per Click

Once the business knows the conversion rate, then it can determine the maximum cost per click. How much is the business willing to pay for each success? Consider a scenario where the sales department has determined that it can afford to pay $10 per conversion. The marketing team, however, is paying on a per-click basic. Since it knows that it takes 25 clicks, on average, to convert a sale, then it cannot pay more than 40 cents per click.

5. Assess Keyword Profitability

Based on the information the business now has, it can determine the profitability of each keyword and key phrase that it intends to use. At this point, it may determine that some keys are not profitable enough, while others receive greater emphasis. There may be other factors in play here than just the bottom line, such as reaching different niches and channels.

6. Set the Budget

The business now has all the information it needs to set the budget. Imagine that the ad provider has offered a rate of 38 cents, which is below the target rate. The sales manager indicates that he wants to achieve 1,000 additional sales through this campaign. Therefore, the marketing department requires 25,000 clicks, which will require $9,500.

If the campaign will use multiple keys, then it will be necessary to itemize the budget based on the desired emphasis. If the allowed budget is less than the necessary budget, then the marketing team can use the difference and the above information as a guide for where to make the cuts.

This has been a guest post from Naked Business Consulting, who have been putting every cent of their PPC budget to good use!

Did you find this article helpful? Please let me know by leaving me your valued comments.

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1 comment:

  1. PPC Campaign Management is very much important if you want your website to give best return on PPC Advertising and to help you in meeting you business goals.


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