40% of brands say that their PPC (pay-per-click) advertising budget is lower than it probably should be.
When you’re creating a PPC campaign, one of the most important aspects is how much you’re going to budget per day or month for your ads. And, if you’re just getting started, it’s often hard to know just how high or low to set your bids.
Creating the right kind of budgeting strategies is a crucial part of ensuring that your campaigns are successful.
So, what’s the best way to go about creating a budget for ad bidding? Here’s how.
What Is a PPC Campaign Bidding Budget?
Before we get started, it’s important to understand what a solid campaign strategy definition contains.
Defining your overall PPC strategy means that you have to also define a campaign budget.
Setting up a paid search campaign requires you to allocate a certain amount of money to each campaign while also defining how much you want to spend per day.
This essentially means that if you know that you can only spend $250 per month on paid ads, then you need to spread that budget out over the entire month.
You can simply divide that $250 by 30 days and then you’ll have your daily budget. However, there are smarter ways to go about optimizing your ad spend that will increase your revenue.
How to Create a PPC Budgeting Strategy
A qualified PPC expert will tell you that creating a budgeting strategy is different for every business.
Even if two businesses have the same amount of money to spend, it doesn’t mean that they are going to need to set the same daily campaign budget.
To create a solid PPC budgeting strategy, it’s important to think about the value of what you’re selling.
Imagine two companies.
Company A is trying to create paid ads in order to sell their brand new $25 coffee maker. Company B is building a paid ad campaign to sell $500 mountain bikes.
If an ad results in a click that later results in a conversion, that conversion is going to be worth a whole lot more to Company B, right?
Think about this when developing your budgeting strategy. How much is a click or conversion worth to you? Don’t set your maximum cost per click to any higher than that number or else you’re going to be losing money in the long run.
You’ll also want to pay attention to your keywords.
If you’re selling in an industry that is highly competitive then you might have to allocate a little more money to a paid ad campaign as you’re going to need to
Budgeting Strategies for a New Campaign
Unless you’re working with a really experienced team of PPC specialists who know exactly what they’re doing, experts tend to recommend starting with a high maximum cost-per-click.
This will allow you to see how your keywords and ads are performing in the first few days or weeks. It will also ensure that people are more likely to click on your ads, which leads to a higher level of ad relevancy. This helps a lot in the long run!
Don’t worry. It’s unlikely that you’re going to have to pay more than a few dollars per click anyway.
However, following this budgeting strategy, you’ll be able to let your keywords and ads work their magic alone.
After seeing how they perform, you can then start to optimize your ad texts and remove and add keywords.
Take a look at the search words for each ad and figure out which keywords you’re paying for that aren’t going to drive conversions.
If you’re selling mountain bikes, for example, and you see that people are clicking on your ad after searching for “children’s bikes for sale,” then add that keyword to your negative keywords list.
This will help you save money on clicks that won’t lead to actual conversions.
After engaging in this kind of optimization for about a week or so, you’ll then be able to start to adjust your campaign strategies and budgets.
After your ads are relevant and receive more traffic, you can begin to lower your daily budget and maximum cost-per-click.
Budget Strategies to Increase Revenue
If you’re not new to ads or have been running a campaign for a while, then you’re likely wondering which bidding strategy should use you if you want to increase revenue from your ad spend?
Great question! This is actually part of the exam that Google suggests all expert PPC specialists complete.
The answer is that you should target return on ad spend (ROAS).
By following this budgeting strategy, you’ll be able to set your bids based on, well, ad spend.
This is a Smart Bidding strategy that you can select within Google Ads. It essentially helps you get more conversion value or revenue for the ROAS that you set.
This also means that, when it’s time for the search engine to hold the auction to see who’s going to appear first on the page, it’ll optimize your bids automatically.
Why is this important? It allows you to tailor your bids for each auction, which ensures that you’re going to consistently rank higher and reap the benefits of that.
Any budgeting strategy that focuses on action and conversions are going to increase your revenue.
Here, you’re not looking to build brand awareness, you’re looking to increase clicks to a high-quality landing page that will drive people to take action (i.e. purchase whatever you’re selling!).
Getting Help with Your PPC Budgeting Strategy
This might seem a little confusing, and that’s okay. That’s why there are courses and certifications for those who work to fully understand how PPC campaigns work.
If you’re left feeling a little confused as to how to develop quality budgeting strategies for your campaign, then it helps to get help!
Contacting a PPC marketing specialist who has experience in developing budgets for campaigns and companies of all sizes and types will ensure that you’re not wasting precious ad money on things that don’t increase your revenue.
Ready to increase your revenue and start winning with PPC?
Reach out to us today to see how we can help you out.