Agency Guide: Determining Your PPC Budget

When it comes to choosing on the right PPC agency for your business, an important preliminary item to accomplish is to decide on your PPC budget. PPC campaigns can be costly, so it's essential to understand how much you're willing to spend before you start your search and what kind of results you're hoping to achieve.

Are you looking for your next PPC agency partner? Listen to our colleague, Jason, to learn about our approach & process for your next PPC campaign.

In this article, we'll cover how to determine your PPC budget and what you should expect to pay for a quality agency.

Want to learn more about how Digital Authority Partners approaches PPC? Watch the video below!

What Is PPC Advertising?

PPC advertising is a form of online advertising in which businesses pay to have their ads displayed on search engines and other websites. When someone clicks on one of these ads, the company will then pay the publisher of the website a small fee.

PPC advertising is a popular way to generate leads and sales because it allows businesses to target their audience with laser precision. Companies can also control how much they spend on their campaigns, making it a cost-effective way to advertise.

How Does PPC Advertising Work?

In order for a company to start using PPC advertising, you'll need to participate in an online auction. You'll first determine how much you want to pay for your campaign and how much you're willing to spend for each click on your advertisers. However, this amount needs to be strategic because you want to beat out other people who are competing for the same customers to get more conversions and views.

This specific price point will be your maximum CPC (cost-per-click). In the online auction, companies like yours will bid on particular keywords relevant to their products and services. The goal is to have your ad display when someone types in one of these keywords.

However, the price needed to do so will fluctuate depending on the amount of competition, the quality of the advertisement, or even the audience you're trying to attract.

To figure out the Average CPC (cost per click), you'll want to take your total spend and divide it by the number of clicks you received from your ad. For example, if you spent $500 on your PPC campaign and had 1,000 clicks, your average CPC would be $0.50.

If you run multiple advertisements, you'll want to know your return on ad spend (ROAS), which can be calculated by dividing the revenue you made from your campaign by the total amount you spent. Of course, you want this amount to be positive to ensure you're making money.

What Should My PPC Budget Look Like?

A great way to get a general idea of how much you should spend for your PPC campaigns may be to calculate how much revenue you're looking to make from your advertising. To do this, you'll first need to understand how many customers you must have in order to reach your revenue goal.

According to Upcity, the calculation should look like this: Amount Of Customers = (Revenue Goal/Number of sales cycles campaign will be running)/Average order amount per customer.

Take that number and divide it by the conversion rate of your sales team and your website conversion rate and multiply it by your cost per click. From there, you'll be able to calculate how much your ideal budget should look like for PPC campaigns. Again, it's important to remember that this number will fluctuate.

How To Maximize Your PPC Budget

     1. Use A PPC Agency

One of the most effective ways to make sure you're getting the most out of your PPC budget is to use a quality agency. A good PPC agency will be able to help you create an effective campaign, optimize your ads, and track your results so that you can see a positive ROI.

     2. Create High-Converting Sales Copy

Your ads are only going to be as effective as the sales copy you use. Make sure your sales copy is clear, concise, and speaks directly to your audience. You'll also want to include a call-to-action (CTA) that compels people to take action.

     3. Use The Right Keywords

The keywords you use in your PPC campaigns play a significant role in a successful campaign. You'll want to make sure you're using relevant, high-traffic keywords that will help you reach your target audience.

You can use a tool like Google AdWords Keyword Planner to help you find the right keywords for your campaign.

     4. Optimize Your Landing Page

When people click on your ad, they should be taken to a landing page that's relevant to the ad they just saw. If not, you're going to lose a lot of potential customers.

Your landing page should be well-designed and include a CTA that tells people what to do next. You'll also want to make sure your landing page is optimized through search engine optimization (SEO) so that it can rank high in organic search results.

     5. Target The Right Audience

If you're not targeting the right audience with your PPC campaigns, you're going to waste a lot of money. Make sure you take the time to understand your target audience and create buyer personas that can help you identify them.

Once you have a good understanding of who your target audience is, you can use tools like Google Analytics to create custom audiences that you can target with your PPC campaigns.

     6. Monitor and Test Constantly

Finally, it's essential to monitor your results so that you can see how well your PPC campaigns are performing. You'll want to track metrics like CPC, CTR, and conversion rate so that you can make changes as needed. Once you know what's working and what's not, you can start testing different elements of your campaign to see what produces the best results.

Conclusion

PPC advertising is a popular and effective way for businesses to generate leads and sales. By understanding how PPC advertising works and how much you should expect to spend on your campaigns, you can create a budget that'll help you reach your goals. If you're ready to get started, let Digital Authority be your PPC agency of choice. Click here to get started today.