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What You Need To Know About Choosing Your PPC Budgets

July 25, 2013 // By: Stream Companies

One of the most common questions when starting a Google pay-per-click account is, “How much should I spend?”

Many people do not have a clue when it comes to determining the amount that should be allocated to PPC advertising.  If you want to target the most available traffic to your site it is important to utilize the Google Adwords tools available to make educated decisions for a monthly and daily spend.

One of the first questions that PPC professionals ask newbies to the PPC world is, “Where would you like to target your paid search account?”

“Do you want your account to run throughout the United States or world, or are you just looking for a more localized approach in a particular state or radius around a city?”

Once you conclude exactly how many people and in what location(s) you want to target you can start to analyze the competition in those areas.

Understanding the competitive nature of the business in that particular area is vital to knowing how much you will spend per click.  The cost-per-click for each keyword must come into play when you are deciding on a PPC budget to start.  You can use tools in Google Adwords like the, “Traffic Estimator” tool to determine what some of your “hot button” keywords may cost and what sort of traffic they will generate.  You can adjust the location settings in the “Traffic Estimator” tool so you can have a centralized look at exactly where you want to target to see what each click will cost.

Once you determine some of the keywords that you want to use and how much they will cost, you can view your competition’s ads in the “Ad Preview and Diagnosis” tool.  Make sure you set your location to exactly where you want to generate ad traffic and then start searching.  This tool will show you exactly what ad promotions your competitors are using in their ads.  Having this edge up will allow you to offer better ad copy incentives and call to action content to win click-throughs over your competitors.

Now that you have an idea of where you want your ads to run, what keywords you want to use, and what the average CPCs will be for those words, you can calculate a starting budget.  Use this budget as a starting point and allow adjustments to be made as needed.  After 24 hours of generating traffic in your PPC account, Google will start to give you daily recommendations for budget changes.

Under the status column Google Adwords will notify you if your account is limited by budget. Google will provide you with a chart, as shown below, of the budget recommendations that they suggest.

 

Not only will Google provide you with the chart above per campaign they will also provide you with search impression share data.  Search Impression Share is the percentage of how many clicks you are receiving from the total number of available clicks in your area.  Search Lost Impression Share (budget) is the percentage of how many clicks you are missing out on due to your budget limitations.

 

With this information you can determine an adjusted PPC budget that gives full ad visibility during all hours of the day. Remember that paid search advertising is always changing, so review your paid search budget frequently to keep up with competition and market changes.

All the best,
Megan Thorne

Megan Thorne is a Senior PPC Specialist with Stream Companies, a Full Service Advertising Agency in the Philadelphia area.

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Topics: Digital Marketing, Advertising, Advertising (general), adwords, Cost-Per-Click, CPC, digital advertising, display ads, display advertising, google, Paid Search, Pay-Per-Click, PPC, ppc, PPC Budgets