How to Determine a PPC Budget for Your Business

Pay-per-click, or PPC advertising, is an unusual new marketing technique that is the product of internet business development. Directing traffic to your website is the goal of PPC advertising, and this is done by hosting ads on highly trafficked web pages–search engines are some of the most popular hosts. However, unlike a normal ad-publishing dynamic in which you pay the publisher for advertising space, in a PPC dynamic you will pay the publisher every time your ad is clicked. The sheer unpredictability of this kind of advertising can make it difficult to establish a PPC budget for your business.

Start by looking into the cost of PPC advertising. Look into Google’s AdWords traffic estimator to see what you can expect to pay for your clicks on hosted ads. Different search terms come with different prices for PPC ads, with the most popular terms being the most expensive. Choosing less popular search terms that have a more promising conversion rate can help you cut costs and maximize the potential of your PPC advertising. By conversion rate, we mean the amount of non-customers who become customers after seeing your ad. Consider this matter carefully to come up with an estimated cost per click for your PPC plans.

Once you know how much you can expect to pay for each click, you’ll need to figure out how many clicks you can expect to receive on a regular basis. Of course, this is a figure that is impossible to predict down to the last decimal. Like many other marketing concerns, it involves a lot of estimation based on statistics. Use a program like Word Tracker to help you figure out how often your desired search terms are being searched. Studies show that approximately one third of users will click on the ads they see in their search results.

For example, say you choose a search term that is looked up 10,000 times per month. If you are paying $1 per click on your ads, and one third of your viewers are expected to click, then your PPC advertising would cost you just over $3,000 every month. The number of viewers who actually click on your ad will depend on many other factors, including your ad positioning, the quality of your writing, and relevance to the searched term. Your actual clicks may come out to only 10 percent of the average estimate.

Determining a PPC budget for your business requires careful analysis of these figures and more. Talk to anĀ SEO services consultant to see how this can fit in with your other internet marketing strategies. You want to be sure that you’ll receive a return on your investment. So consider the likelihood of converting a non-customer to a paying customer as part of your equation. Although the cost of your clicks may fluctuate from month to month, the increased revenue brought it by an ad with a strong conversion rate can balance out your expense. Figure out how much you can afford to dedicate to ad development and cost per click in your PPC advertising campaign.

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