Setting up a PPC Campaign?

Often, it can be difficult to determine how much budget to give when setting up your PPC campaign, especially if you have not ran PPC campaigns in the past.  It’s like asking the new marketing assistant what the entire departmental budget should be.  Even for professionals, this can be difficult in some industries.

The first point of call is always Google Traffic Estimator.  Initially, start by researching and compiling what keywords will be searched on to drive traffic to your business.  Once you have a list of keywords, paste them into the Traffic Estimator, set the options and it will give you an idea of search volumes, cost per clicks (CPC’s) and advise a budget.

The Google Traffic Estimator is the best free tool available.  Do bear in mind to take these figures with a pinch of salt as often they are inflated.  They don’t take into account quality score and often pick up no search volume for long tail keywords that should be incorporated into your campaign.

With the above information in mind, decide what budget you can afford to spend?  How many visits to your site will generate a conversion?  The most important thing is to ensure that the cost of traffic generating a conversion is below the revenue gained by that conversion.

For example; if you have an average CPC of 50p and 2% conversion rate, a £1000 monthly budget would generate 2000 clicks per month.  An estimated 2% conversion rate would generate 40 conversions so; a conversion is likely to cost £25.  You need to ensure that the cost of gaining a conversion is well below your profit per sale to give you good return on investment.  In this case, if the product sells for £75 and was bought in for £35 then there is £40 profit per sale.  This would make the campaign successful for the company if the estimates were realistic.  It would be possible to increase the budget to gain as much traffic as possible; if you could keep the conversion costs and rate the same, then the campaign could grow to be highly profitable.

TIP:  Always use Adwords Conversion Tracking in your campaign so you can optimise your campaign ensuring that the cost per conversion in your campaign is below what you can afford to pay.  With this in place you can prevent running keywords and ads that generate no conversions or conversions above the level you are wishing to pay.

Tanasé Rivers

PPC Account Manager