How To Set a PPC Budget that Won’t Break Your Bank

Pay Per Click (PPC) budgets can be quite scary to new advertisers. Almost as scary as a fight against Muhammad Ali.

(Are you prepped for the fight? - image source)

A lot of new advertisers often don't know the answer to the question of how much their PPC budget should be. And that's very understandable.

One thing you want to know before setting a budget is the approximate cost per click of the keywords you want to bid on. A good tool to estimate the costs is the Keyword Tool that you'll find within your AdWords interface under the Tools and Analysis tab. You can then activate a column that allows you to see the approximate cost per click of each keyword.

Quick word of advice: This tool is hardly ever accurate, but it does give you a rough estimate of cost per clicks that allow you to gauge the competitiveness prior to setting your PPC budget. But take it with an enormous grain of salt, as you can still be competitive and profit from a much lower cost per click than what the tool is estimating.

Now, one thing I'd recommend is to start off very small with your PPC budget. The reason for this is that a lot of new advertisers don't know exactly how to create and structure their accounts, so their $300 daily budget may be gone within the first hour. This is especially true, if say, something like broad match keywords are the only keywords they're bidding on.

1) Is the product or service I'm selling available like a never ending well? Meaning, can you sell an infinite amount of what you sell without it bogging you down? If that's the case, then an AdWords or any PPC account that shows positive ROI, should never have a budgetary limit. If you can get $4 back for every $1 you spend, then you should keep pushing as much money as possible into the system.

2) Is the product or service you're selling time consuming? Meaning, does it require you to spend time with the new client in order to be paid? If that's the case, then you'll only want to have a PPC budget that allows you to effectively handle all orders and service calls. Sometimes you'll actually need to pause your campaigns or lower your budget because of this.

If you're a smart cookie, then you've already secured yourself a free advertising credit of $100-$300. By using this, you can test out your ideas to see if they would work out or not. Sometimes these credits act purely as training wheels for new advertisers.

(Time to take off those training wheels - image source)

If you don't see results immediately, or if you think things are way too expensive, don't worry. You'll often find out that success in the PPC world comes with optimization of the account. The structure of your keywords, ads, and landing page design have a lot to say on your conversion rate and how much your paying per click. So don't give up immediately, find a way to make it better, or hire someone that will make it work (not tooting our own horn). Okay, maybe we are.