What should we be bud­get­ing for PPC adver­tis­ing?”

This is one of the most com­mon ques­tions mar­keters have been hear­ing as the new year approach­es.

To answer that ques­tion, let’s look at five PPC bud­get­ing best prac­tices that will put you on a path to bud­get­ing suc­cess.

1. Spend the Allotted Budget Over the Year

Use it or lose it.”

I’ve heard this so many times when it comes to PPC bud­get­ing.

If you’re under-spend­ing on your core pro­grams, try test­ing addi­tion­al adver­tis­ing chan­nels, such as remar­ket­ing, dis­play, or Face­book Ads.

Not reach­ing your bud­get can hap­pen for a few rea­sons.

One rea­son could be that you aren’t set­ting the bud­get high enough to take advan­tage of all of the vol­ume.

Please note the cal­cu­la­tions may be for dif­fer­ent time peri­ods than your actu­al bud­get time peri­od. These cal­cu­la­tions assume the key­word bids remain the same. The CPA remains the same in this sce­nario, but be sure to hand cal­cu­late out if the esti­mate for the CPA scales out at the same rate.

2. Allow for Seasonality

E‑commerce com­pa­nies have sea­son­al­i­ty and hol­i­day trends down to a sci­ence. But most PPC adver­tis­ers have some lev­el of sea­son­al­i­ty asso­ci­at­ed with search­es for core key­words.

Wouldn’t it just be easy to take the annu­al bud­get and divide by 12?

No such luck.

In Bing Ads, for the exact same key­words, we see the vol­ume fol­lows sim­i­lar trends with a low­er over­all esti­mate of 5,000 search­es on the low end and about 40,000 search­es on the high end.

Again, this is an oppor­tu­ni­ty that could be missed if you aren’t allo­cat­ing the bud­get for sea­son­al­i­ty on Bing Ads – or, worse yet, you aren’t using Bing Ads as PPC plat­form.

Most busi­ness­es will have some sort of sea­son­al­i­ty, even if it’s just a slow down dur­ing the hol­i­days for B2B com­pa­nies.

Ana­lyze search vol­ume trends along­side rev­enue trends.

3. Budget Allotted Per Product Line/Initiative

Some PPC adver­tis­ers for­get to set bud­gets prop­er­ly for product/service lines by ROI or rev­enue goals.

There are a few dif­fer­ent ways to think about this.

  • You can allo­cate more bud­get to one of the fol­low­ing:
  • The top sell­ers.
  • High­est return.
  • Items that need the most pro­mo­tion and expo­sure to increase sales.

Regard­less of which approach you take, this should be a con­sid­er­a­tion in each PPC account.

How the bud­get is allo­cat­ed will be unique to each busi­ness and its goals.

4. Allotting Budget Per Tactic

It’s impor­tant to remem­ber that each stage in the buy­ing fun­nel has its own val­ue.

The bud­get should be con­sid­ered per tac­tic – and where it hits in the buy­ing fun­nel.

For exam­ple, cer­tain key­word search­es are clos­er to the sale for brand terms where­as dis­play cam­paigns may be more about gen­er­at­ing brand aware­ness.

Read the next sec­tion for more on how to deter­mine the val­ue and bud­get for this with the assist­ed con­ver­sion reports.

5. Majority of the Account Should Reach the Marketing Goals

Does that seem like an odd state­ment? Why shouldn’t all of the account reach the mar­ket­ing goals?

While we have made great strides in attri­bu­tion, it isn’t always pos­si­ble to get the most accu­rate per­for­mance report­ing.

We can’t always see a cam­paign con­vert to meet the goal for CPA.

At times it’s impor­tant to be present for cer­tain search­es for brand­ing and aware­ness, and because they assist with final con­ver­sions.

In the assist­ed con­ver­sions report, in click assist­ed con­ver­sions, we can see how cam­paigns con­tributed to the last click con­ver­sion. These cam­paigns were clicked on, but ulti­mate­ly were not the final click that led to the con­ver­sion.

As an impor­tant part of the con­ver­sion path, we should con­sid­er these assist­ing cam­paigns in the bud­get allot­ment, even though we may see a low­er ROI or per­ceived low­er per­for­mance than oth­er cam­paigns.

Final Thoughts

The larg­er the mar­ket­ing ini­tia­tive, the more com­pli­cat­ed PPC bud­gets can become.

There is no one-size-fits-all cal­cu­la­tion to PPC bud­gets, but allo­ca­tion toward orga­ni­za­tion­al goals, based on vol­ume and cam­paign per­for­mance, is key.