PPC, or pay-per-click, is an important part of any digital marketing strategy. It’s a powerful tool that can help you drive more traffic, leads, and sales to your website. But if you want to get the most out of it, you need to plan your budget carefully.  

In this article, we’ll cover: 

  • How much budget do you need to start PPC? 
  • What affects your PPC budget? 
  • How to split PPC budget?  
  • 5 top PPC budget setting tips 

How much budget do you need to start PPC?

The amount of budget you need to start PPC depends on a few factors, such as the goals you’re trying to achieve, the size of your target market, the type of campaigns you plan to run and the keywords you are targeting. Generally speaking, to make your campaigns as successful as possible, we recommend having at least a few thousand dollars set aside to start PPC activity, rather than hundreds. This will cover the costs of setting up and running campaigns, such as keyword research, ad creation, and setting up tracking and analytics.  

First, you need to decide how much money you have available to spend on your PPC campaign. This will depend on your goals and objectives – how much you want to spend, how much you want to make, and how quickly you want to see results. You also need to decide how much you are willing to spend per click, as this will affect the success of your campaign.  

Next, you need to consider the type of campaign you are running. Are you running a search campaign, display campaign, video campaign or a combination? Each type of campaign requires different budgets, so it is important to consider which type of campaign and platform will be most effective to reach your goals and objectives.   

Once you’ve decided on an initial budget, to get the most out of it, you need to make sure that you’re targeting the right audience and optimizing your bids for the best possible results. This means researching the keywords that your target audience is searching for and setting your bids accordingly. You also want to ensure that your ads are effective. This means testing different ad copy and creative and making sure that you’re using the right ad formats and targeting options.  

Once you’ve started running your PPC activity, you then need to be able to measure the success of your campaigns. This means having tracking software in place to measure clicks, conversions, and ROI. This will help you optimize your campaigns over time and ensure that you’re getting the best possible results from your budget. 

What affects your PPC budget?

The budget allocated to PPC campaigns is a major factor in determining the success of those campaigns. Understanding the various factors that can affect a PPC budget is key to optimizing that budget and getting the most out of it. Factors that may affect your PPC budget include:  

1. Size of budget

The first factor to consider is the size of the budget itself. PPC campaigns require a certain level of investment before they can be expected to generate any meaningful results. If the budget is too small, it will be difficult to generate enough clicks and impressions to make the campaign effective. Too large a budget, on the other hand, can quickly become wasteful.  

2. Competition

The amount of competitive bidding to advertise the same product or service can also affect PPC budget. The more competitive the market, the more expensive the PPC campaigns will be. Because of this, it is important to research your competition before launching a campaign. It is also worth noting that how expensive your PPC campaigns will be also depends on the type of product you are selling and how much your competition is willing to spend. Clicks for a pair of socks will be cheaper than for life insurance or property, for example. Researching the competition will allow you to gain an understanding of the current market to give you an idea of how much you need to spend to make sure your ads are seen and clicked on. 

3. Type of campaign

The type of PPC campaign chosen can have an effect on the budget too. Different campaigns require different levels of investment, depending on the goals of the campaign.  

Whilst an awareness campaign may require more budget with a longer-term growth strategy, sales and lead campaigns require less budget to see immediate sales and lead results. 

4. Target audience

The target audience can also affect the budget. If the target audience is narrow, the cost of ads will be lower since there are fewer people to target. Conversely, a broad target audience can be more expensive since more people need to be reached. Budget will also be affected by how relevant the audience is so it is important to do your market research before setting the budget.  

5. Length of campaign

The length of a campaign can also affect your PPC budget. If the campaign is short-term, the cost of the ads will be higher, since more of the budget will be spent on the ads themselves. Longer campaigns, on the other hand, can spread the cost of the ads over a longer period of time, which can help to keep the budget under control.  

As you can see, there are many factors that can affect the budget allocated to a PPC campaign. Understanding these factors and taking them into account when setting a budget is key to getting the most out of your PPC campaigns.  

How to split PPC budget? 

To maximize the effectiveness of your PPC campaigns, you need to make sure that you are splitting your budget in the right way. When splitting your PPC budget, it is important to consider what your overall marketing goals are. Are you looking to increase brand awareness, generate leads, or increase sales? Knowing what you want to achieve with your PPC campaigns will help you decide how to split your budget.   

The first step in splitting your PPC budget is to determine how much you are willing to spend. This should be based on your overall marketing budget and the expected return on investment (ROI) you are looking to achieve. Once you have established your budget, it is time to decide where to allocate it.  

Between platforms 

One of the most important aspects of splitting your PPC budget is to decide which platforms you will use for your campaigns. There are many options available, with the most popular PPC channels being Google Ads, Bing Ads, and Facebook ads.  

Each of these platforms will have different targeting options and depending on your goals, you may also want to consider other channels such as LinkedIn Ads, display networks, and remarketing. 

Between types of Campaign

Once you have a strategy in place, you can start to consider the different types of PPC campaigns available. The main types are search engine marketing (SEM), display advertising, and social media advertising. Each of these has its own advantages and drawbacks, so it’s important to weigh up the pros and cons of each before making a decision.  

When splitting the budget, it’s important to consider the different stages of the customer journey. For example, SEM campaigns are best for targeting potential customers at the start of their journey, while display and social media campaigns can be used to reach customers further along the conversion funnel. 

Between types of Keywords 

To split PPC budget based on type of keywords, you need to identify the types of keywords that are most relevant to your business, and which will be most likely to lead to the most ROI.  

Whilst informational keywords may have a lower click-through rate than transactional keywords, they are more likely to attract high-quality traffic that is more likely to convert. On the other hand, transactional keywords will have a higher click-through rate and are more likely to result in immediate sales. 

5 top PPC budget setting tips:

While PPC can be an effective way to reach customers, it can also be expensive if you don’t manage your budget properly. Here are our five top tips for setting a PPC budget. 

1. Define Your Goals 

Before you can set a budget, you need to define your goals. What are you trying to achieve with your PPC campaigns? Do you want to increase brand awareness, generate leads, or make sales? Knowing your goals will help you determine how much you should be spending on your campaigns.  

2. Research Your Competitors

It’s important to research your competitors’ PPC campaigns to get an idea of how much they’re spending. This will give you a sense of the market and help you decide on an appropriate budget for your own campaigns.  

3. Understand Your Audience

Knowing who your target audience is and what they’re looking for will help you create effective campaigns that reach the right people. You should also consider their buying cycle and create your budget accordingly.  

4. Utilize A/B Testing

A/B testing allows you to test different versions of your ad to determine which performs better. This can help you maximize your budget and get the best results from your campaigns.  

5. Monitor Your Results

Once your campaigns are up and running, it’s important to monitor them to ensure you’re getting the most out of your budget. Make sure to track your results, monitoring the most relevant metrics for the different types of campaigns you’re using, or a blended KPI that’s most relevant to your business, and adjust your budget as needed.  

By following these tips, you can create an effective PPC budget that will help you reach your goals and maximize your return on investment. For access to further PPC budget setting tips, book a demo of our AI-driven budget planning software, BOSCO™.