PPC Budget Guide: Are You Spending Your PPC Budget Wisely?

In pay-per-click marketing, as with so many things in life, you have to spend money to make money. But how do you figure out what you should spend?

Your monthly and annual budget is a huge part of your PPC strategy, so whether you’re new to PPC or have been doing it for years, it’s worth taking a step back to figure out if you’re making the most of your spend.

The most important consideration for budget planning is your lead needs. You’ll need to sit down and figure out some characteristics of your leads, such as:

  • Lead quality
  • Target cost per lead (CPL)
  • Buying cycle
  • Visitor frequency
  • Geographic location

If you’re not sure what your target lead looks like, start by answering the following questions:

  • What can I afford to spend?
  • How do I place value on a “lead?”
  • What is my current conversion rate?
  • How many leads do I need through PPC?

Let’s take a closer look at the information you’ll need to make smart decisions about your PPC budget.


How Much Budget Do You Need to Get Started in PPC?

Once your marketing team knows the answers to these questions, you can do some basic calculations to help you figure out a budget. Here’s an example of how that math might work:

PPC Budget Guide: Are You Spending Your PPC Budget Wisely? image ppc budget guide funnel example3

If you need 250 new clients in a month and your close rate is 15%, then you need a PPC lead goal of 1667 conversions per month to turn 15% of them into 250 leads. If your cost per lead is $25, you’ll need $41,666.67 per month to drive that many leads and clients, or $1388 per day.

Author: Elisa Gabbert