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PPC Marketing: How To Set Pay-Per-Click Campaign Budgets

By: Ricky Weber Click author's name for more of his/her articles

When it comes to putting your product in front of lots of interested people, today it is hard to find a better and more cost effective way to do this than to advertise on the internet using search engines and contextual content networks. The keyword here is "interested," because it is better to find 10 people who are truly interested in what you are offering and ready to make a purchase than it is to find 1,000 people who do not want to buy. However, no matter how many people you get to view your product or your offer you do not want to run up exorbitantly high advertising costs in the process, so setting an acceptable budget become an important part of this process.

A crucial part of any business is setting budgets, and the reason it is important to learn about setting a budget for your online advertising campaign is because of the hundreds of stories of people getting eaten alive with pay-per-click advertising, racking up thousands of dollars in costs with little to show for it because they did not take the important prerequisite planning steps. For those who have spent years in the past promoting their business offline because the internet had not yet become as prominent in people's lives, making the switch to online advertising can be an entirely different ballgame but taking the right initial steps can help to assure your success.

The Two Most Important Metrics For Setting A Proper Budget

There are two important metrics that are important to understand before you commit your own money to advertising online: max CPC bid and daily budget. The max CPC (cost per click) is the highest amount of money that you are willing to pay when somebody clicks on your ad. Note that this is not the amount that you will pay every time, because nearly all of the major search engines where you will likely be advertising will use some form of automated auction process (hence the term "bid"), so the amount that you pay per click will actually depend on the time of day and the day of the week according to how other advertisers have set up their own campaigns.

The daily budget is the most amount of money that you are willing to spend in a twenty four hour period to have your ad displayed on the search engine and across the content network. This will usually reset at midnight every night so if your daily budget is not large compared to your max CPC then you might see that you ad will no longer display after around 3PM because you have hit your max spend limit. Some search engines will have only a monthly budget amount, but you will get to choose whether you want to spend this across 30 days evenly or run your ad continuously until you reach the budget limit.

Keyword Selection And The Role It Plays In PPC Budgeting

Now even though the keywords that you select do not strictly have to do with budgeting, a guide about pay-per-click would be incomplete without mentioning the role that keywords have in how much you must spend in order to have your ad displayed to visitors. This is especially important if you are a small business owner with a daily budget under $100, because you will be competing over the same visitors with large corporations and banks that have five-figure daily advertising budgets and can afford prominent listings in the top spots while crushing the smaller advertisers with outrageously high cost per click prices.

If you are aiming for low costs but still want a decent amount of traffic and to display your ad to visitors who are truly interested in what you are offering, it will be better for you to pick keywords between 4-7 terms instead of 2-3 terms. For instance, their is fierce competition for the keyword "credit cards" with some big advertisers paying $3.00 per click or higher, while the keyword "credit cards for people with bad credit" might only run $0.10-$0.25 for the max CPC. Aiming for these more obscure keywords can allow you to keep your advertising costs down while still finding targeted visitors to present your offer to.