In the world of digital marketing, everything is a numbers’ game
Advertising budget, ad spends, lead conversions, returns on investment (ROI).
It can often get confusing for marketers to figure out how to use the company’s advertising money effectively.
There is no tool that exists to calculate the ideal amount of advertising money that needs to be spent to generate maximum ROI.Calculating the advertising budget for pay-per-click (PPC) advertising is often a matter of trial and error. It is also compounded by the fact that there’s no way to predetermine how many clicks your campaign will get.
In order to begin budgeting, a digital marketer needs to keep some specifics in mind:
• Company goals regarding lead generation, revenue and profit
• Ideal ROI
• Current gap in spending
• Tools to be used for PPC advertising
• Costs for traffic needed to drive conversions
• Important Key Performing Indicators for the company
• Competition in the industry
• Sales conversion targets
Planning the Google AdWords Budget
Begin with a Budget Estimate
This will be an intelligent guess of your baseline budget. It depends on how much money company executives are comfortable with spending every month. This budget can be adjusted on a monthly basis based on your results and the success of your local Miami AdWords campaign. The budget estimate also takes into account how important the AdWords campaign is compared to your current digital marketing strategies.
Use Google Keyword Planner to Calculate Cost-Per-Click
The average cost-per-click (CPC) is the money you pay to Google locally in Miami once an ad is clicked by a potential buyer. Google Keyword Planner lets you calculate an estimate of the CPC based on the parameters you enter. Adjust the remaining parameters according to their relevance: industry, location, terms to avoid, etc.
Simply enter search terms in the product field to get an estimate of the cost of that keyword. For keyword suggestions, you can take help of the landing page field and enter your website’s URL to generate relevant keywords. The planner will show you the bids for your keywords which you can use to arrive at a budget estimate.
Know Your Conversion Rates
It is very important to know your average customer conversion rates per month. This will tell you how many leads you need to generate and how many of them will convert to customers. For people unfamiliar with conversion rates, a good estimate to use is 1 to 2 percent, as it happens to be the rate for most websites out there.
It is usually helpful to calculate customer conversion rates for both digital and offline marketing methods such as phone calls, billboards, pamphlets, etc.
Using these metrics, you can enter all your data into a spreadsheet to calculate the first budget of your local Miami PPC and Google AdWords campaign.