No budget is too small for PPC

Think you don’t have the budget for PPC? Think again. Play your cards right and you can achieve amazing results with a minimal budget. In fact, really focused and highly measured pay-per-click campaigns can be one of the most effective ways to spend a tight budget.

What does a customer cost you?

The first consideration is how much your average customer is worth to you, either for an initial sale or for the lifetime value of the typical customer. Then you will need to determine how much you are willing to pay to acquire each of those customers, leaving you with your desired profit margin.

For example, if your typical customer spends around $ 500 in their lifetime, in the first year, or in whatever time period you have chosen to define, and you spend $ 100 to acquire that customer, you have a profit margin left. $ 400. – minus other costs, such as operating and material costs. To simplify the calculation, you can start with your average profit per customer, if you have that data.

Once you’ve calculated those values ​​and determined how much you’re willing to spend per customer acquisition, you can start planning your PPC campaign.

Conversion rates are a key metric

Then your conversion rate comes into play. No company has a 100% conversion rate, or if it does, you must have an epic sales and marketing team, so you need to consider both the leads you receive that don’t convert and those that do. Let’s say that, on average, you convert one lead out of every 10 you receive. If you spend $ 100 per customer, that leaves you $ 10 to spend per lead.

Of course, if you are analyzing your first results and find that your conversion rates are much lower than expected, you will need to recalculate your cost per lead or reconfigure your campaigns to increase your conversion rate to where you need it to be.

That’s the beauty behind PPC – you can calculate all of this down to the dollar and you have a pretty good idea of ​​what you will need to spend to acquire a certain amount of business and therefore what your ROI will be. The alternative? You could spend thousands of dollars on, say, a radio ad campaign and have far less data to determine how effective your creativity is or your true conversion rates.

Segmentation produces exceptional ROI

Beyond great measurability, PPC offers much finer targeting capabilities than many advertising mediums. Consider the example of the radio. You can target an audience based on the main demographic a particular station is reaching, but you can’t force certain listeners to tune out and reduce the amount you’re spending by cutting out a subsegment of your potential audience.

But with pay-per-click, you can use negative keywords to eliminate a subset of search engines that are likely to have a different intent and precise targeting methods to really drill down to the ideal customer. It’s not hard to see how these capabilities result in smarter spending and higher returns for every dollar spent.

Seasonal approaches and buying cycles

Even if your budget is extremely limited, you can use this calculation and determine a spending amount for a short-term promotion. If you sell items for patriotic holidays, for example, you can run a PPC campaign in the weeks leading up to Memorial Day, July 4, and even Labor Day. Similarly, a company that makes custom Christmas decorations can run a campaign in November and December only, or whatever lead time makes sense for their customers’ typical sales cycle.

Additionally, you can use fine-tuned PPC targeting to reach customers at a specific point in the buying cycle. By bidding on keywords that indicate customers are ready to make a purchase, rather than in the initial research phase of the buying cycle, you can often increase your conversion rates by reaching customers when they are. ready to make a purchase.

Targeting Options for Smart PPC Spending

Best practices for PPC generally apply across the board, but there are some helpful tips that are especially beneficial if you’re working on a tight budget.

• Don’t run too many campaigns. In fact, if you are on an extremely tight budget, you may want just one campaign or a few very focused campaigns. In any case, running too many campaigns at once just means you’re over-spending your budget and may not see the results you want. Better to focus your efforts on a few key areas than trying to spread your budget across dozens of potentially less profitable campaigns.

• Be vigilant and eliminate slow performance. Monitoring your campaign analytics is even more crucial for low-budget campaigns. Careful monitoring allows you to quickly identify the keywords that are not working and remove them from your campaign, shifting your spend to the best performing ones to increase conversion rates and ROI. Likewise, if your landing pages are getting mediocre results, you can jump in with a few alternate iterations and run some A / B tests to improve performance.

• Stay away from broad keyword match. Broad keyword match is useful for branding campaigns and marketers with large budgets. But when your budget is tight, you can’t afford to spend money on advertising in irrelevant terms. Stick to the exact match and you’ll get better results.

• Use geographic targeting to your advantage. Even if your business is service-based, you may have better brand recognition in certain areas. Targeting your most profitable locations can produce better results in a shorter period of time.

• Identify and use negative keywords. There are variations on almost all keywords that essentially disqualify a search engine from the target audience. Using exact match helps prevent this type of problem in the first place. But if you use broad match, identifying negative keywords means you won’t pay for clicks that will rarely, if ever, convert.

Don’t let a small budget deter you from PPC. By making smart decisions and using the full capabilities of Google AdWords, you can create well-targeted campaigns that guarantee a positive ROI.