I talk about marketing budgets with clients on a regular basis. Investing money haphazardly is irresponsible. If you are going to spend money on marketing, know what your costs will be upfront and what your expected results should be so you can evaluate your investment.  That is one of the things I like about using advertising tools like Google AdWords, Facebook and LinkedIn.

In each case, you have the ability to set specific budget limits  and objectives for your campaign. You can change these limits daily as you track your results and adjust your strategy.

Basic Pay Per Click Budget Tips

  • Decide on a time limit. Whether you test for a week or a month based on the pace of your business. If you are only looking for four new clients in the next 30 days, a week may not be enough time to tell if your advertisement is working. On the other hand, if you have a high-volume product, you will know very quickly if you are on the right track.
  • Determine the maximum you are willing to spend for the campaign. Don’t just pull this number out of thin air. It should relate to the number of new clients you reasonably expect to generate from your PPC campaign and the value of a customer. A good rule of thumb is to spend no more than 30% of the lifetime value of a new customer in acquiring them.
  • Think about the following:
    1. How many customers do you want as a result of the test  –  be realistic.  If you typically sign five new customers a month, don’t expect a PPC campaign to generate twice that number. If you are already generating leads from other activities and your PPC is designed to supplement that, then start with 20% of your total new customer acquisition goal. In this case, one new customer a month is a realistic goal.
    2. What percentage of your web traffic becomes a lead. If  1,000 people come to your site in a month and of that, 25 people fill out some type of conversion form, then 2.5% of your traffic becomes a lead.  Watch carefully as you conduct the campaign. Does this ratio stay the same as traffic increases? It will if you are directing people to relevant, conversion pages from your ads
    3. What percentage of your leads become customers. It’s great to capture a lot of email addresses, but are those people becoming customers? If not, go back and look at what is bringing them to your site to begin with.

In general, if you are a beginner, start small and check results frequently to see if the campaign is working.

 Have you tried using PPC to supplement your organic marketing? What kind of results have you had?

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