PPC Budgets for Your Business: How to Calculate it?

Your money is expensive, and the last thing you want to do with it is waste it on a poorly optimised PPC campaign.

Learning how to establish a PPC budget can assist you in determining how much you will need to invest to achieve your company objectives.
In this video, I’ll show you how to do just that. I’ll walk you through what goes into a PPC budget and how to get the most bang for your buck.
Check out the timestamps in the description if you’re looking for a particular movie segment.

Budgeting for PPC

PPC (pay-per-click) advertising allows you only to pay when people click on your adverts. In a moment, I’ll explain how to compute PPC budgets. Let’s start with the fundamentals of PPC advertising.

PPC advertising operates based on an online auction. When you start a PPC campaign, you usually tell the ad platform how much you want to spend on the whole thing. Then you place a bid for how much money you want to pay for each click. Keep in mind that you’re competing with other advertisers for a chance to reach your target demographic.
Because it’s a bidding system, the cost-per-click, or CPC, may change. Your CPC may be affected by factors such as the quality of your ad, targeting, or the competition.
This cost-per-click calculation may estimate an average CPC: Average CPC = Advertiser Cost /
Number of Clicks.

If you’d instead not estimate your cost manually, we offer a tool that will do it for you.

Use a tool like Google Advertisements Keyword Planner to understand the search volume and cost of the terms you’re targeting with your ads. Depending on your targeting, your ad platform may offer recommendations.

When using a platform like Google Ads to execute PPC ads, you’ll discover the average CPC in your campaign menu. On social media, you’ll probably see your CPC in the ad management interface of your site.

You should also be aware of the ROAS, or return on ad spend, of your marketing campaign. While you should certainly consider your budget, the return on investment from your campaigns is as vital. If you see that you’re spending more than you’re making from your advertising, it’s essential to reassess your spending and how you’ve optimised things for your audience.

The ROAS computation is as follows: ROAS = Total Revenue / Total Cost
Setting goals is still an important aspect of every campaign you do. Calculating the investment required to get there becomes much easier when you know what you want to achieve.

Set SMART goals specified, quantifiable, achievable, relevant, and timely. It’s a lot easier to plan for a 25% increase in website conversions in the fourth quarter of your business than it is to declare you want more visitors on your website. What exactly is the overall purpose here?
There isn’t a single statistic that can tell you if your PPC estimate is excellent or terrible. A successful campaign meets its objectives, generates a favorable return on investment, and stays within budget.

I should certainly point out that before you spend for PPC, you should consider all facets of your digital marketing. You don’t want to spend all of your money on advertisements and then be unable to hire a site designer or SEO expert. Consider the larger picture.

Then I’ll get to the juicy stuff. The calculations were made.
How do you figure out how much you should spend on PPC?
On its website, UpCity lays out a fantastic revenue-focused approach for estimating your PPC budget. To achieve your objectives, you must first determine how many consumers you require.
The formula is as follows:
[Revenue target/number of sales periods campaign will run] / Average Sales Per Customer = Number of Customers (NoC).

You may then put that figure into the PPC budget calculation, which looks like this: [(NoC/ Sales Team Conversion Rate) / Website Conversion Rate] = PPC Budget CPC x
Here’s the formula if you already have a target budget and only want to figure out how much you should set aside each day. It’s a lot easier.

Budget for the day = Budget for the month / 30.4
Don’t start watching the following video just yet. I have a few suggestions to help you get the most out of your investment.

How to get the most out of your PPC budget

1. Be adaptable

You and your staff may adore an ad campaign, but it doesn’t mean that your target audience will.
Pay attention to the results of your campaign. If you discover a lower-than-average click-through rate (CTR), it’s possible that your ad language or creativity isn’t attracting the attention you expected. If your ad’s CPC is unusually high, you might consider fine-tuning your targeting.
It will take some investigation and testing to get the answer.

2. Fine-tune your keyword selection

Negative keywords might help you restrict the number of unqualified clicks on your PPC advertising if you’re targeting keywords. When used with a platform like Google Ads, this strategy guarantees that you don’t show up for irrelevant queries, saving you money and allowing you to access a more likely-to-purchase audience.
If you need more information, we have a video about negative keywords.

3. Make use of automation

It’s a takeover by robots! Just joking. It’s time for the robots to take over!
Many ad platforms have automated solutions to assist you in getting the most out of your campaigns. Make use of them! Allow technology to do part of the job for you, whether automated bidding, testing, or reporting.

Finally, make use of Google’s Smart Bidding feature. To make your social media advertisements more effective, use third-party solutions. Join forces with us to benefit from our MarketingCloudFX technology.