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How to Create a PPC Budget [With Template]

January 19, 2023

by Anna Peck

Senior SEO Specialist at Clutch.co

Having a defined budget for your PPC services and campaigns will ensure that your company stays organized and efficient. 

Digital marketing is at the subset of every business. But what marketing strategies a business chooses to invest in depends on numerous factors.

A popular marketing strategy that businesses invest in to generate leads, boost brand awareness, and drive traffic is PPC.

PPC (pay-per-click) advertising is a model that helps your company advertise online and appear in SERPs. Unlike SEO, PPC focuses on advertising, meaning that PPC campaigns come in different shapes and sizes but include targeted ads that generate fees through clicks.

Each time one of your ads is clicked, the advertiser pays a fee - meaning that your company is paying for targeted visits to your website.

There are numerous factors to consider when getting started with PPC, a budget being one of the most important. Without a PPC budget, your business will be lost in the complexities of the field.

This article dives into the insights of PPC campaigns, how to craft a specialized budget for a PPC strategy, steps for creating a PPC ad campaign, and a helpful template to get your marketing team started.

Hire a PPC services agency to help with your PPC campaigns.

What Goes Into a PPC Campaign Budget?

Many variables need to be considered to craft a successful marketing budget for PPC.

The following practices are involved in building a PPC campaign budget:

  • Keyword types: Marketing teams need to make keyword considerations for their PPC campaigns - are you targeted high-funnel, low-funnel, or branded searches?
  • Search engine focus: While Google is the most popular search engine with its own PPC system Google Ads, there are other search platforms like Bing that your business can promote their services on - factor these into your campaign budget as they likely vary in price.
  • Devices: Is your company looking to draw clicks and traffic from mobile or desktop services?
  • Copywriting & Design: Ads only come together if a team of resources is behind putting together the imagery and ad copy.
  • CPA (Cost per acquisition) targeting: This strategy allows businesses to set a target cost per acquisition at a campaign or ad group level - it helps optimize your campaigns to receive as many conversions as possible.
  • ROA (return on ad spend) targeting: Your target ROA is the average conversion or value your company would like to get for each dollar you spend.

A PPC budget defines how much money a company is willing to spend. Once these elements and target metrics are defined, a PPC budget can become established to accompany any size campaign.

How to Create a Budget for PPC Services

Calculating the right PPC budget can be tricky with all the different factors and considerations that pop up.

Start with a basic step-by-step approach to get started.

Businesses can build a successful PPC budget by following these steps:

  1. Define your SMART business goals
  2. Identify keywords for your objectives
  3. Determine your traffic requirements
  4. Research CPC estimates
  5. Estimate profitability
  6. Reassess if necessary

2. Identify Keywords for Your Objectives

Before settling on a search campaign, your team needs to identify the search terms or keywords your target demographics are using to find your product or service.

Focus on keywords that have immediate resonance and purchase intent with your audience - these will likely lead to a higher conversion and click-through rate (CTR).

Use a keyword planner to keep all of your ideas organized for your ad campaigns.

Are there words your company doesn’t want your services to show up for? Those are considered negative keywords — for your PPC campaigns, you can set those up as words that your business never wants your search ads to trigger for.

3. Determine Your Traffic Requirements

Once your goal for your PPC strategy is set, your business needs to determine how much time and investment goes into building up your traffic requirements.

To figure this out, use tools like Google Analytics to look at past data and compare it to the current search volume of the keywords you have planned.

Using analytics, you can also view your site’s overall conversion rate to get an idea of how users are converting, which will in turn help with planning for your next round of PPC planning.

Knowing how your website performs when it comes to key metrics will help your team form a more solid budget for PPC.

4. Research CPC Estimates

Once your team has an idea of how much traffic your business will need to reach your goal, it is time to gain more of an understanding how what you will need for your CPC.

Cost-per-click (CPC) is the advertising model that websites use to bill advertisers based on the number of times users click on their advertisements.

Google’s Keyword Planner is a great resource to help plan your overall PPC efforts. This tool estimates costs and search volume, which your team will need to calculate CPC.

When your team understands how your team has performed in the past and the competitiveness around certain search terms, your PPC budget can factor in the need for more research in certain areas.

Additional Reading: 'PPC Pricing Guide'

5. Estimate Your Profitability

All PPC campaigns should have a measurable goal - if your company wants to see a strong average CPC or return on your ad budget, think about that when planning aspects of your PPC budget.

PPC Campaign Budgeting Strategies

PPC campaigns can be broken down in different ways through the use of various strategies:

  • Daily budget: Most PPC budgets are set at a daily spend level — there might be times of overspending or when the budget isn’t reached, but Google helps your company balance it out within these campaigns.
  • Shared budget: Shared budgets allow one budget to be managed among multiple campaigns. With a shared budget, any leftovers can be used by other campaigns.
  • Bidding strategies: Campaign owners can set the type of bidding for their campaigns by targeting certain CPAs and ROAs, and maximizing conversions.

ROAs generally only count the price of a customer’s first purchase toward ad campaign revenue. Calculating this is dependent on your overall business plan and model.

Your PPC campaign's average cost should be reevaluated to your company over time. Ultimately, the lifetime loyalty of customers is more than enough.

6. Reassess if Needed

Testing is a big aspect of PPC — not everything you try will work.

While crafting your first PPC budget, think critically about what is achievable. Your company can revamp your budget as much as possible.

Consult professionals to figure out what works and what doesn’t - not every PPC strategy works well for each company, so try not to overthink if something doesn’t seem to factor into your budget.

Over time, you will have to spend time in allocation mode or restructure your keywords and search terms. All of these come as practice while budget planning.

PPC Budget Template

Now that your marketing team knows what to focus on, start planning out your PPC budget.

ppc budget

Download this template for your PPC budget planning.

Factors for PPC Cost

Traditional PPC advertising follows a specific equation to yield the total cost to advertisers:

Number of clicks x Cost per Click = PPC Cost

Several other factors impact the cost of PPC, including:

  • Account size
  • Management spend
  • Geography
  • Industry & Competition
  • Channels for PPC
  • Resources
  • Desired results

As your company works through and adjusts your PPC campaigns and budget, all of these factors should be considered.

Steps to Create a Successful PPC Campaign

If your company is stuck on how to create a PPC campaign, follow these steps to develop an effective PPC strategy:

Step 1: Define your PPC goals
Step 2: Research your target audience
Step 3: Optimize landing pages and other materials
Step 4: Build the ads
Step 5: Analyze and optimize

These five steps are all your marketing team needs to start developing a competitive PPC strategy with a smart campaign.

Take Your Business to the Next Level with PPC Services

Many companies utilize digital marketing in their overall business strategy. PPC should be essential to all businesses that want to target potential customers with focused advertising and marketing campaigns.

With a well-researched PPC strategy, your business and brand can spread to millions.

Creating set budgets for your PPC campaigns limits the workload. Use our template to help your marketing team plan the most effective search campaigns.

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