How to set your PPC budget effectively?

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Posted on March 23, 2020

How to set your PPC budget effectively

To understand your Value per Click – a vital factor for determining a bid that makes your campaign profitable; you need statistics to act on. The moment your campaigns go live, people start clicking and the statistics start coming in. For these statistics to be actionable, they need to be significant.

Essentially, you need to pay for traffic that is not profitable until you have statistical confidence for fine-tuning your campaigns. Even after you obtain these statistics, it is most likely that your new campaign will not be profitable. You need to work at optimizing your ads, fine-tuning your campaign targeting, and optimizing your sales funnel in order to achieve a Value per Click that is higher than your cost-per-click.

Basically, you need to buy statistics in order to achieve a profitable campaign. How you do this is determined by your budget. If your budget is limited, you’ll need to get more meaningful statistics with less money. This is done by focusing on the fewer users in the more advanced stages of the decision-making funnel and using less targeting in your campaigns.

You will need to consider advertising either fewer products or limiting your advertising to one product or service. Once you do that, start implementing search advertising. Your ads will be seen by a smaller segment of the 1 billion internet users out there, but you will be risking less money upfront.

Initially, your campaigns will be smaller, which means you can focus more attention on optimizing fewer ads and sales funnels to achieve profitability faster. The downside, however, is that it will take longer for your campaigns to reach their full potential. With a larger budget, you’ll be able to spend more on data to optimize before you become profitable.

This means you can target a wider audience by advertising multiple products and services you offer. You’ll also be able to reach users higher up in the decision-making funnel. They will take more time and optimization to convert. Top of the funnel users can be targeted on the search network with less actionable keywords. Display advertising is also a good way to reach users at the top of the sales funnel but comes with a lot of data to optimize, making it more costly.

Implement your search advertising with Google Ads to effectively send users to the buyer’s decision-making funnel down the path of your sales funnel.

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