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September 26, 2008
How Do You Determine What Your Company’s Pay Per Click Advertising Budget Should Be?
 

Pay Per Click (PPC) advertising is a great way for new websites to attract targeted traffic, and for established sites to roll out new products and build brand recognition. Pay Per Click can easily lead to overspending with little return on investment if the campaign is not carefully planned and managed from the beginning.

 

How do you strike the right balance for your company’s PPC advertising campaign and determine a budget to maintain cost controls? Here are some constructive ideas to inform your decisions:

  • Start small—Success with Pay Per Click advertising is not dependent on who spends the most money. It’s far more practical to start with a modest budget of a few dollars a day and find out what is and what isn’t bringing positive results.

  • Consider hiring a PPC specialist—This will add an additional expense initially, but can save your company a fortune in the long run. Unless your company has the resources for an on-staff PPC specialist, you should consider hiring an Internet marketing professional who is experienced in managing PPC campaigns to handle your Pay Per Click advertising. This person will also be able to provide help with establishing and maximizing a budget.
     
  • Don’t become overly concerned about top placement—Anyone who has the financial means can achieve top search engine placement with PPC, but the conversion rates and the ad’s overall impact on your bottom line are more important. An ad in the fifth spot that has been properly conceived and implemented can attract just as much, if not more, traffic than the ad at the top. It will cost less money, too.

  • Keyword research—The quality of your PPC ad keyword research is the best way to ensure that you get the maximum bang for every PPC buck in your budget.

  • Competition in your Industry—In hyper-competitive industries like automobiles, computers, and high-end electronics, a larger PPC budget may be necessary. The old saying goes, “You gotta spend money to make money.” But, crafty and experienced PPC consultants will know roundabout methods that will work well or better than taking on the industry heavyweights and their enormous budgets.

  • Track the results of each ad—One of the best ways to determine a PPC budget is to read weekly PPC reports and chart each ad’s progress over time. Essentially, these are the “profit and loss statements” of PPC advertising, and the information they provide will have a big impact on the size of your budget.

Each of these points are key factors in helping you determine the size of your Pay Per Click advertising budget, but the salient point here is: Only spend what you can comfortably afford. That may seem like an over-simplification, but PPC advertising tools allow you to make adjustments in real time. And, unless you’re cautious and shrewd in managing your PPC campaign, costs can quickly add up, exceeding your budget by a large margin.

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Nick Stamoulis is the president of the full-service Internet Marketing Firm, Brick Marketing.  Nick’s philosophy and strategies can be found in his SEO blog the, Search Engine Optimization JournalNick Stamoulis is also the editor and publisher for seven Internet marketing-related blogs: Pay Per Click Journal, Social Marketing Journal, Blog Marketing Journal, Email Marketing JournalLocal Advertising Journal, and Online Publicity Journal.

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