A quick guide to working out a budget for a PPC campaign

How do you approach pay per click marketing? The first step is to see what sort of budget you need and this is a guide to work out a really vague estimate of what you will need. Why is this helpful? Because it allows you to look at your budget and decide if you should spend the money on PPC or another form of marketing.

Step 1 – what is the cost per click for your keywords? Use this tool from Google to have a look. Just follow the steps and look at the prices.

For this example let’s say its £0.50 per click (ish)

Step 2 – How many sales would you like to gain per day, now think about this don’t just say as many as possible. Take a realistic amount using current sales levels in you organisation.

For this example we will say 10

Step 3 – How much do people spend per shop, on average? This depends on what you are selling, if it’s a service then chances are its one item, the service, if you are an ecommerce site then how much on average do people put in their basket?

Lets say for this example £100

Step 3 – How much of the shop is profit, again on average?

Let’s say for this example its £20

Step 4 – how much profit are you able to sacrifice for PPC? Think about repeat sales when you look at this, chances are if the service is good they will come back again direct and it will not cost anything on advertising

Lets say for this example £10

Step 5 – Let’s do some math.

On average it takes about 18 clicks per sale. So each sale in this example costs around £0.50 x 18 = £9

Cost per day for 10 sales is about 10 x £9 = £90

Say 30 days per month so a monthly budget would be 30 x £90 = £2700

Summary;

• Cost per sale is £9 which is less than the maximum you can afford to spend on PPC (£10) per sale. If this was more you would have to cap your budget at a lower price
• Monthly budget would need to be around £2700 to gain your 10 sales per day (300 per month)

This information enables you to start to think about costs and see where you want to go. This information is all based on estimates and a little calculated guess work but isn’t all marketing like that!

We do these calculations for free for anyone thinking about going down the PPC avenue, give us a shout if you want some help 0131 208 1313. We will also give you a lot more guidance than this and if you decide this is for your company we can manage your campaign.