How to Estimate Your PPC Budget<\/h2>\n
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There are a lot of different strategies out there for estimating daily budgets, but here are the top three most important steps to help you get a better sense of what you should be spending on ads in digital marketing:<\/p>\n
1. Establish a goal<\/h3>\n
It\u2019s always good to start any marketing campaign with a (realistic) goal in mind.<\/p>\n
For example, you may set a goal to make $3,000 in profit each month from your PPC campaign.<\/p>\n
Knowing what measurable outcome you\u2019d like to shoot for can really help you figure out a realistic estimated budget and bidding strategy from the start.<\/p>\n
You can then work backwards to figure out what\u2019s required to hit your target goal. Take a look at your site analytic metrics<\/a>, average order size, click-through rates (CTR)<\/a>, conversion rates, and cost of clicks (more on this below).<\/p>\n If you know that the average order size is $100, the conversion rate is 5%, and the average cost per click is $2, then for every 1,000 people that come to your site each month, 50 make a purchase. You made $5,000 in revenue but had to pay $2,000 for those clicks. Therefore, you made $3,000 in profits and attained your original goal! You now know you should allocate around $2,000 for your PPC budget.<\/p>\n Choosing the right keywords is vital when it comes to building a profitable PPC campaign.<\/p>\n You want to select keywords that are high intent for lead generation, otherwise you may just be driving users to your site that don\u2019t actually intend on buying anything. And when you\u2019re paying per click, this can squander your budget away \u2014 not a bright idea. Your goal is to reach potential customers.<\/p>\n Make sure you\u2019ve got a good mix of short-tail and long-tail keywords<\/a>. Short-tail keywords are more competitive but can bring in a lot of traffic. Long-tail keywords usually have much less traffic, but they\u2019re low in competition and often have higher conversion rates.<\/p>\n Check out our in-depth guide on PPC keyword research<\/a> to know exactly how to choose the perfect keywords for your PPC campaign.<\/p>\n Pro Tip:<\/strong> Try Similarweb keyword planner\u2019s Last 7 Days Keyword Filter<\/strong> to stay ahead of the competition by giving you real-time keyword insights. And don\u2019t stop there \u2013 get the tea on the best techniques for effective keyword research<\/a>.<\/p>\n When it comes to smart PPC budget management, one of the best tricks to have up your sleeve is to simply check out what your competitors are doing.<\/p>\n There\u2019s no need to make PPC budget estimates in the dark. Surely you have some competitors with established PPC campaigns \u2014 and you can use all their hard work to your advantage.<\/p>\n Competitor analysis will be a huge help for calculating your PPC marketing expenses as it gives you a clearer understanding of current market conditions.<\/p>\n You\u2019ll want to research:<\/p>\n Armed with this knowledge, your business will be prepared to begin a successful PPC campaign.<\/p>\n But how do you find all this juicy information?<\/p>\n Well, you could hack into your competitors\u2019 system…though we don\u2019t recommend that. A much easier (and legal) solution is to take advantage of our competitive intelligence tools<\/a> \u2014 which instantly reveal competitors\u2019 estimated ad spends, budgets, how they deliver on paid search strategies<\/strong>, and a whole lot more for the world\u2019s three biggest search engines (keep reading for more details shortly.)<\/p>\n Once you have an estimated advertising budget to work with, the next step is to divvy that budget up into different campaign<\/p>\n The number of campaigns will be different for every brand\u2019s business goals and KPIs, but may include factors like:<\/p>\n Each campaign houses a specific set of keywords within their ad groups. It\u2019s a good idea to segment your keywords into themed groups in order to better control exactly where your PPC budget goes.<\/p>\n Once you have these different segments of ad campaigns at your disposal, you can make informed decisions about campaign hierarchy. This simply means you need to decide which campaigns deserve the most budget and which can afford to receive a bit less funding to maximize your return on investment for your PPC advertising<\/a> efforts.<\/p>\n The campaign at the top of your hierarchy should be the one with high-intent keywords that are most likely to drive people to make a purchase on your site, and thus best reach your target audience<\/a> and bring the best ROI to your business.<\/p>\n Keeping your campaigns organized this way makes it a lot easier to gauge each campaign\u2019s performance and make tweaks along the way to improve optimization, getting the most bang for your buck.<\/p>\n It\u2019s also a good idea to allocate your budget between testing new ads and keywords out, versus your ongoing PPC campaigns that have been working well.<\/p>\n Allocating some resources \u2014 say, 15% or 20% of your overall PPC budget \u2014 to testing will help you get creative and try new strategies. Perhaps you can try targeting a different audience, or change up your ad copy<\/a> with new keywords. You might be surprised at what you learn!<\/p>\n You can then move the successful ones over to your ongoing campaigns, drop the ones that don\u2019t work, and move on.<\/p>\n With ongoing campaigns, you should always be optimizing and altering as you go. This will help your ROI continue to improve over time, as your strategies get better and better.<\/p>\n Similarweb\u2019s tools shine a light on exactly what your competitors are doing for their own PPC campaigns \u2014 taking out all the guesswork.<\/p>\n With Similarweb, you can instantly see a snapshot of how much other businesses in your niche are spending on their PPC campaigns, what their ads look like, what keywords they\u2019re targeting, and more. This knowledge in tow, you\u2019ll be much better informed on how to estimate and spend your ad budget.<\/p>\n Similarweb ensures you stay ahead of PPC trends<\/a> and correctly target your ads. You can use our competitive analysis tools to uncover your competitors\u2019 PPC strategies and which keywords they\u2019re targeting. You can then make your own ad campaign with these keywords and rise above them in the SERP rankings \u2014 beating them at their own game.<\/p>\n Pro tip:<\/strong> Avoid a bidding war with your competitors and actually optimize your budget by discovering keywords that differentiate your brand from the competition by targeting untapped keyword gaps<\/a> in your industry.<\/p>\n As your ad campaign strategies develop, you\u2019ll need to adapt and reconfigure your tactics based on competitive insights<\/a>, so having the right tool kit at your disposal is vital.<\/p>\n With Similarweb by your side, you can now plan your PPC campaigns knowing:<\/p>\n Pro tip:<\/strong> While you’re planning your online advertising strategy, let Similarweb help you identify negative keywords, evaluate keyword seasonality, and align your PPC keywords to relevant search terms.<\/p>\n Setting up a realistic PPC budget is key when it comes to achieving the best ROI. Still, be aware that although PPC has a reputation for bringing \u201cimmediate\u201d results, this doesn\u2019t necessarily mean you\u2019ll be profitable right away. It can take some trial and error before it starts to pay for itself.<\/p>\n This is exactly why it\u2019s crucial to know what you can afford to spend. But once it starts paying off, PPC ad campaigns can bring in impressive ROIs. It\u2019s all about staying one step ahead of the competition and making improvements as you go \u2014 and with the right tools, this is a lot simpler than it seems.<\/p>\n 2. Select keywords<\/h3>\n
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<\/p>\n3. Run a competitor analysis<\/h3>\n
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How to establish campaign hierarchy in a PPC budget<\/h2>\n
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How to allocate test budget vs. ongoing budget<\/h3>\n
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<\/p>\nHow Similarweb can help you build the best PPC budgets<\/h2>\n
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The light at the end of the funnel<\/h3>\n