Whether you’re a specialist PPC marketer or a PPC novice, setting the right budget for your campaign is critical. From small start-ups to multinationals, any spend on advertising will need to prove it’s worth in terms of ROI. As a result, one of the questions you’re most likely to be asked by the powers that be is “how much should I be spending on PPC?”

The answer to this question can be exceptionally varied and nuanced, but below, we’ve listed some key considerations that should be thought of when taking that first step in the creation of a PPC campaign…

Aims & Goals

In order to budget effectively, it is important to have a clear understanding of what you’re actually looking to achieve from the advertising campaign.

This ultimately means understanding what you want from a customer's click; whether this is to help drive sales, or to simply drive engagement from your audience. The key is to establish and understand the value of each conversion to your business.

Location

An important part of establishing a budget is knowing how far you want your ads to reach. The size of your geographic targeting will determine the size of the budget required. For example, if you’re looking to target nationally, you may wish to invest more into the campaign so as not to appear a drop in the ocean. Conversely, if you were to target a small town or a city, you can look at smaller budget as the potential audience size is much smaller.

Cost & Initial Budget

The above may seem black and white, but having a fundamental understanding of the competitive landscape is also an important part of knowing how much to budget.

A cost will be attributed to each of the keywords you are looking to target (the broader, the more expensive). Using Google's Adwords Keyword Planner, you can determine how competitive a particular phrase is & how much it is likely to cost. By collating your keywords and their predicted costs, you can multiply these by the days you want your campaign to run, giving you a base budget figure to start off with.

In any case, this initial budget should only be used as a starting point, and adjustments will need to be made on a regular basis based on the performance of your adverts.

Sustainability

The sustainability of a campaign will depend largely on how much money you have to invest in the account, and how well your ads are performing.

As mentioned above, any initial budget should only be seen as a starting point. By creating solid campaign structures with well optimised ads, you’re likely to see the “quality score” of your keywords improve, which can help to reduce cost per clicks (CPC's) and potentially save money on your overall budget.

That being said, if you’re working with extremely competitive phrases, expensive CPC’s with a low initial budget & are not seeing a reduction in CPC’s, then you’d need to ask if PPC right for you in the long term?

One way in which sustainability of a budget can be managed when you are at this stage is within the Google Ads interface. After 24 hours Google will start to provide you with recommended budget changes. Should a campaign within your account be “limited by budget”, Adwords will advise on how to get the most bang for your buck - which is usually by adding more budget!

Setting the correct budget for your PPC campaign is critical to successfully managing any PPC campaign. Establishing your goals as a business is the most important first step. Researching your keywords and knowing the price you’re willing to pay for them gives you a better understanding of the competitor landscape and will help when it comes to optimisation, all-in-all making you a better PPC marketer.

If you need some help with your PPC, don't hesitate to ask - we offer a free PPC audit that can help you get your PPC on track, just click the button below to find out more.