PPC bud­get­ing might not be the sex­i­est top­ic, but being a good stew­ard of your bud­get can have major impacts on your PPC per­for­mance. Bud­get con­sid­er­a­tions usu­al­ly go by the way­side when there are lots of oth­er new, trendy top­ics to focus on, like a new ad for­mat, tar­get­ing type, or new chan­nel. But stay­ing on top of your bud­get can be more impactful—and more profitable—than try­ing out any of these new tac­tics.

That’s why in 2020, I’d love for one of your PPC res­o­lu­tions to be cen­tered around your bud­get­ing.

It doesn’t have to take up a bunch of time. A quick check in at the begin­ning of each month or quar­ter can go a long way in mak­ing sure you’re treat­ing your bud­gets with the care they deserve.

At this point, you might be think­ing, “That sounds great, but what can I do to pay more atten­tion to my bud­get?” Here are five sim­ple things you can do to take bet­ter care of your bud­gets in 2020.

1. Start forecasting

I’ll be the first to admit it: I hate fore­cast­ing.

In a num­ber of ways, fore­cast­ing feels like guess­ing as to what per­for­mance is going to be—-and it is, but hope­ful­ly it’s an edu­cat­ed guess that can help you make smart deci­sions about where you spend your adver­tis­ing dol­lars.

There are a hand­ful of data points you can use to fore­cast per­for­mance for upcom­ing months:

  • Google Key­word Plan­ner traf­fic esti­mates.
  • Exter­nal news orga­ni­za­tions.
  • Month over month or year over year per­for­mance trends.

Over­all, the biggest take­away for fore­cast­ing isn’t to be exact­ly right and pre­dict the future, but to have some sort of real­is­tic expec­ta­tion of per­for­mance so you can plan ahead.

Is traf­fic esti­mat­ed to dou­ble next month? Or will it drop sig­nif­i­cant­ly? Is there an expect­ed turn in the mar­ket for the sec­ond half of the year that sug­gests you should front load 2020? Or hold your cards for a boom in Q3?

Spend a lit­tle time to think ahead and know what’s com­ing. Then check back in after a month or quar­ter and see how far off you were and what you can learn and adjust for next time to be a bit more accu­rate.

2. Create projection sheets

Fore­cast­ing gives you a long term look at poten­tial per­for­mance, but using a pro­jec­tions sheet can help you under­stand where you’re pac­ing to end the cur­rent cal­en­dar month (or any cus­tom date range for that mat­ter).

ppc-bud­get­ing-pro­jec­tions-sheets

The table above is from one of my client’s pro­jec­tions sheets. Here’s how the data breaks down:

  • P7D: Past sev­en days per­for­mance.
  • MTD: Per­for­mance this month to date.
  • Pro­ject­ed: Pro­ject­ed stats based on the most recent sev­en days extrap­o­lat­ed for the remain­ing days of the month plus the per­for­mance so far.

Here’s how the for­mu­la works:

(P7D / 7 * No of days left in the month) + MTD Stats = Pro­ject­ed Per­for­mance

If you want a walk-through of this, here’s a video show­ing how to set up a pro­jec­tions sheet.

Grant­ed, this won’t be a guar­an­tee of where your month will end up per­for­mance wise, but it can give you an edu­cat­ed guess on where you’re head­ing based on what has hap­pened recent­ly and the per­for­mance you’ve already seen that month.

3. Be flexible

If you’re putting togeth­er fore­casts, you’ve like­ly also start­ed to assign bud­gets to dif­fer­ent chan­nels or cam­paign groups based on what your fore­cast­ing is telling you. This is great, but don’t have this be set in stone.

Being inflex­i­ble with bud­gets can get in the way of max­i­miz­ing per­for­mance.

You’ll notice that the pro­jec­tions sheet I have above doesn’t only include spend. There are oth­er met­rics like clicks, con­ver­sions, and CPA includ­ed as well. You can add any met­rics you want to this for­mu­la depend­ing on what’s impor­tant to you.

In this same pro­jec­tions sheet, I have dif­fer­ent charts cre­at­ed for each chan­nel: Google, Bing, etc.

Let’s say my bud­get for the month is $345k. I might have start­ed the month want­i­ng to spend $300k on Google and $45k on Bing, but giv­en the per­for­mance we’re see­ing this month and the dif­fer­ence in CPA, I’ve shift­ed my spend to max­i­mize avail­able vol­ume on Bing and then spend the remain­ing bud­get on Google.

This flex­i­bil­i­ty based on per­for­mance is more appar­ent when you fore­cast what per­for­mance would be like if I would have stuck to our orig­i­nal bud­gets vs the cur­rent pro­jec­tions.

With just a sim­ple shift in bud­get, we were able to save $1k in spend, gain 99 more con­ver­sions and low­er over­all CPA by $0.74. Now, these might not be huge­ly ground­break­ing stats, but I’ve nev­er met some­one who doesn’t want to save mon­ey AND dri­ve more con­ver­sions at the same time.

4. Choose the best budget type for your account

Get­ting a bit more into the nit­ty-grit­ty of cam­paign man­age­ment, it’s impor­tant to make sure you’re using the right bud­get types for your needs.

Each plat­form has its own bud­get setups and they all seem to oper­ate dif­fer­ent­ly.

Face­book bud­gets work dif­fer­ent­ly if you’re try­ing to use dai­ly or life­time bud­gets.

Google Ads has cam­paign lev­el or shared bud­gets.

This is like­ly a quar­ter­ly check in item, but be sure you’re using the right bud­get set­tings depend­ing on your goals. As your cam­paigns evolved and ini­tia­tives are switched out as the year goes on, it’s impor­tant to take a step back and ensure you’re set­ting your­self up for suc­cess and not choos­ing the same bud­get options because that’s what you did last time.

Choose the best budget type for your account

5. Know what you can afford

My last thought is for new adver­tis­ers or ini­tia­tives in 2020.

Although PPC has a great rep­u­ta­tion for “imme­di­ate” results, that doesn’t mean that you’ll be prof­itable right away on any­thing brand new. There are those rare cas­es where a cam­paign begins to pay for itself with­in the first hours or days of launch, but this is pret­ty rare.

More than like­ly, there will need to be a peri­od of test­ing, learn­ing, and opti­miz­ing before you see your cam­paign be prof­itable. This is why it’s impor­tant to know what you can and can’t afford to spend.

I’ve had a num­ber of com­pa­nies ask me in the past cou­ple of years what bud­get it takes to be suc­cess­ful with PPC; unfor­tu­nate­ly, there’s not real­ly an answer to that ques­tion. But there are some things I sug­gest you keep in mind:

  1. Again, results aren’t imme­di­ate, so you’ll like­ly be spend­ing more than you’re mak­ing for a peri­od of time. Just because it’s not prof­itable right away doesn’t mean that the ini­tia­tive won’t ever turn a prof­it.
  2. You need data to opti­mize. There’s a temp­ta­tion to set very low dai­ly bud­gets to start. While being con­ser­v­a­tive can be a good thing, it can also hurt you if you’re not gain­ing enough insights to opti­mize from. Don’t shoot for the moon, but don’t restrict your cam­paigns too much either. Both can result in lots of dol­lars spent with noth­ing gained and, almost worse, noth­ing learned.
  3. If your bud­get is restrict­ed, do some of the fore­cast­ing and pro­ject­ing men­tioned above and pri­or­i­tize the most like­ly avenue for suc­cess first. Just like with ini­tial results, if this chan­nel does or doesn’t work, that doesn’t mean that oth­ers will fol­low suit. It’s ben­e­fi­cial to test many dif­fer­ent paths, but if you only have a set amount of bud­get avail­able for a new test, focus on the most like­ly to per­form first.

Focus on your PPC budget in 2020

Bud­get­ing isn’t going to be the hot top­ic of PPC in 2020, but that doesn’t mean that it won’t have a major impact on your suc­cess. Spend some time get­ting orga­nized for the year this month and set up a cadence of check­ing in on per­for­mance, flex­i­bil­i­ty, best prac­tices, and new tests to ensure you’re not ignor­ing this opti­miza­tion path in the new year.

SOURCE: Word­Stream