How to Determine a PPC Advertising Budget

You have your first PPC campaign idea blocked out within your head. You even know your targeted audience, your A/B testing concepts, and a rough idea of where you want to push your ads… but the one thing you don’t know is how much you can expect to spend on all of it. After all, your PPC budgets can get kind of pricey if you haven’t advertised this way before.

Well, I’m going to show you how to hone down on a proper budget, depending on your advertising medium, in an effort to avoid breaking the back and maximizing your return on investment (ROI).

Start by Choosing a PPC Advertising Network

It’s important that you don’t overlook this first step. You may have the idea to advertise across a whole slew of networks, which is certainly a great way to promote your business, your products, or your services, but each network is going to be priced differently.

There are plenty of networks from which to choose:

  • Google AdWords is arguably the most popular and widely known form of PPC advertising. These are the paid search results you see anytime you perform a search on Google and are the entire basis of Search Engine Marketing.
  • Bing Ads is Microsoft’s version of and a direct competitor to Google AdWords. These ads run on the Bing search network anytime you perform a search on Bing.
  • Facebook Advertising is a widely popular way to get your content, products, services, and other promoted content to the 1+ billion users currently utilizing Facebook.
  • Twitter Advertising can offer a way to promote your content to the 328+ million Twitter monthly users.
  • LinkedIn Advertising has grown ever since Microsoft bought the social network and they’ve even expanded ways to reach users with your content or ads.
  • Yelp Advertising is simply paid Yelp placements that show your business listing above other organic Yelp search results, in much the same way Google or Bing works.
  • Other Networks such as AdRoll simply use the exchange of other network’s placements based on your remarketing and retargeting data. AdRoll is a great way to get started with Facebook Advertising if you’re inexperienced with the Facebook Advertising platform directly.

Do Your Homework: Marketing Research & Data Mining

Depending on the network you choose to promote your ads and content, you’re going to have some homework to do in order to gather the marketing data necessary to formulate a great campaign. For the purposes of this article, let’s look at Google AdWords.

Research for Google AdWords is centered upon keywords, as that’s how your ads are served to potential customers via their Google search results. Let’s say that you’re a bakery and you’re trying to sell wedding cakes. The first thing you’ll want to do is go to Google’s Keyword Planner and type in the keywords of what you’d expect your audience to search in order to find your ads. Once you get a list going, it will show you the average number of searches for your targeted area and also the average cost-per-click (CPC) you can expect to pay to maintain your ads in search results.

Searching for Wedding Cake Vendors for Keyword Research - AZMO Marketing

As you can see from doing the research, you can expect to spend anywhere between fifty cents and just over a dollar for a click on any of your ads using these keywords. With AdWords conversion rates ranging between 1% and 11% depending on the industry, let’s say you want to convert 5% of your total clicks into wedding cake clients/sales. That means that if you were to set your monthly budget at $100, you can expect $5 to be working for you. With this in mind, scale your budget accordingly.

If the typical cost of a wedding cake from your bakery is $500 and you convert 5 out of 100 clicks, even if you’re paying $1 per click, then you sold $2500 in cakes for every $100 spent on advertising. That’s a huge ROI! Now, if you want to see sales at $10k, then adjust your budget to $400.

In a nutshell, this is a simple formula to help you determine a rough estimate for your total budget.

Reconcile your Marketing Goals with your Ad Spend and Adjust as Needed

As alluded to earlier, your conversion rate can and will vary depending on trends, the performance of your ads, and a variety of other factors. If you notice that you’re converting 10% of your clicks, then you can scale your budget down (unless you can handle the workload, because that’s a huge payout). But more likely, you will see conversion rates slip down to somewhere between 1% and 4%. Once you notice this happening, you may have to adjust your budget a little higher, but it’s important to maintain a positive ROI as your bottom line. If your ROI slips, you should probably adjust your budget and probably your overall advertising strategy to maintain lower CPCs, higher clickthrough rates (CTCs), and a good percentage of conversions.

Let AZMO Marketing Handle Your PPC Advertising

If I’ve lost you somewhere in this post, don’t fret. Marketing isn’t as simple as promoting your business or assets to an audience, though it certainly includes those things.

Spending money on your business is necessary in order to make it grow. “You have to spend money to make money,” or so the ‘experts’ tell us. But if you perceive that you’re just throwing away money trying to advertise your business, promote your brand, or sell your products, then perhaps you just need an adjustment to your expectations, your budget(s), or your overall advertising strategy. Lucky for you, that’s exactly what we know how to do.


Contact us at AZMO Marketing today for a quick, easy, and free consultation to see what we can do for you to get and keep your ROI sky-high on your Search Engine Marketing or PPC advertising efforts.

(314) 328 – 0625