When it comes to spending money to make money; how much is the right amount to spend?
With PPC, it can be even more difficult to pinpoint the golden amount to maximize ROI. In this post, we will be talking about some best practice tips on how to get the most out of your paid media budget.
Do your research before deciding on a budget
Before launching any paid media activity, we would suggest compiling a list of search terms that your target audience is most likely to use in a search engine. Start with keywords that show strong purchase intent, for example, ‘black leather shoes’ has more intent than ‘black shoes’ or ‘leather shoes’. These are keywords that are more likely to drive higher click-through rates and conversions.
Check CPC estimates & search volumes
How many times your ad is shown depends on the search volume and how many people are actively looking for your products and/or services.
If there is a high search volume, that usually means there is a lot of competition – with that comes higher costs. You’ll need more investment to start with to break into the space and start gaining impression shares. Lower search volumes tend to be more advantageous as there is less competition and less cost involved.
When you’re researching into search volumes, it’s a good idea to use Google’s CPC estimates in Google Keyword Planner. Here, you will be able to see rough price estimates per ad when taking into account competition.
Bids should be adjusted for device, location performance & demographic
When starting your paid media campaign, you may already have a target market or a specific location in mind. In this case, you should ensure your ads are being served to these specific demographics and geographical spots.
Once your campaign has launched, we advise making bid adjustments monthly. This should include age, gender, location, and device based on how these targets are performing when compared with the account average.
Altering your bids as they are running allows you to show ads more, or less, frequently based on how, where, and when people are searching.
How much should I spend?
As much as possible – so long as you’re profitable.
If your campaigns are growing more revenue than the cost of the ads, why limit your budget? For some guidance, we would recommend splitting PPC campaigns into three areas of budgeting:
We would advise placing at least 70% of your budget every month into your top campaigns driving conversion. These are reliable campaigns you can trust to always deliver high-quality leads.
To keep on top of the game, you should always keep an eye out for new opportunities. This is where 20% of your budget should go. This category still aims to be conversion drivers but allows you to move the campaign forward so as not to stagnate.
This is your testing budget. For example, a brand awareness campaign for paid search. This could be targeting upper funnel keywords that might not seem like they would naturally convert on the last-click model. However, in the long-term, these are helping to influence buyer behavior and traffic which can then be remarketed.
BOSCO™ uses a sophisticated data model to estimate your search metrics, in order to provide a recommended channel budget split. If you’re looking for a reliable way to test alternative budget scenarios and see where you spend be investing your budgets, ask BOSCO™. To speak to one of our specialists, drop us an email at firstname.lastname@example.org.