Pay-per-click marketing requires that you spend money in order to make money. But how do you know how much you should spend?

Monthly and annual budget planning is a huge part of your PPC strategy, so whether you’re new to PPC or you consider yourself an expert, it’s a smart idea to take a step back to assess if you are still making the most of your investment in this strategy.

Here, your reliable PPC management company shares the key factors that will help you decide how to invest your PPC budget:

What Affects the Value of a Lead

The value of a lead depends on various factors, including:

Geography

For example, if you are a local business, leads from a specific region, for instance, are likely more valuable to your business than a lead from a region with less potential customers.

Bounce Rate

If visitors are leaving your site quickly, it’s impossible to know if they are satisfied with your service or if they even noticed your PPC ads. Even if they clicked on your ad and then you received a conversion, it doesn’t mean you’re getting the best value from your PPC campaigns.

Time on Site

The longer a visitor spends on your site, the more likely they will convert. For example, in the first ten minutes on your site, a visitor might be looking for information about your products. If a visitor spends more time on your site, such as an hour or more, they can potentially become a lead.

Things to Consider When Setting Your PPC Budget

Here are some factors to consider when setting your budget:

Setup Costs

PPC is an expense and it’s an investment. You can’t expect it to return any money until you’ve spent it, as it takes time to get your campaigns up and running and to find the right keywords and other factors that will help you make the most of your investment.

This is why you should plan for setup costs and factor them into your budget. This will help you create a budget you can realistically live with, from the start.

Keyword Considerations

Keyword bidding is an important part of PPC, but you should not just blindly select the highest-bidding keywords.

For example, you might have a PPC budget of $50, but if you spend all of this money on a keyword that has a low average CPC, you might not make any money.

The low average CPC means that you will have to pay more per click to generate the same number of clicks as you would with a keyword with a higher average CPC.

Campaign Launch

Don’t forget the campaign launch. This is when you actually put your ads in place. It’s not an insignificant cost, but if you do it right, you will see your investment grow exponentially!

The Lifetime Value of each Customer

It’s essential to take into consideration the lifetime value of each customer. If you are making a profit from each customer, the more customers you acquire, the better.

However, if you are spending more money on customer acquisition than you are making from those customers, your campaign is likely to be an overall loss.

Assess Your Online Ads

You don’t have to spend a fortune to run successful PPC campaigns, but you can’t skimp on investment, either.

Finding the right balance between what you should be spending and the value you get in return is key to making PPC an effective part of your marketing strategy.

And while the information above will help you establish an appropriate budget, there are always exceptions to the rule. If you have a product or service that is extremely popular, you might need to spend more to get in front of the right audience. If you are unsure about how much you should be spending on your PPC efforts, it’s best to consult an established PPC management company that can help you. 

Frank Digital Agency offers internet marketing services in Adelaide that includes PPC advertising and management. Get in touch with us to find out how we can help you!