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5 PPC Budget Management Tips To Get More Bang for Your Buck

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PPC budget management definition

PPC budget management is the practice of allocating advertising money to your campaigns to achieve your goals.

Are you spending too much or too little on your pay-per-click advertising (PPC) campaigns?

PPC budget management is important for any business, from small- to medium-sized businesses (SMBs) to large enterprises. It ensures your spending is optimized and drives returns to grow your revenue.

If you want to optimize your PPC spending and get more bang for your buck, keep reading. This blog post will go through these topics:

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What is a PPC budget?

A PPC budget is the amount of money spent on online advertising. You can use your PPC budget to:

While PPC refers to any pay-per-click advertising, including ads on social media and display ads, this blog post focuses on PPC budget management for Google Ads.

What is PPC budget management?

PPC budget management is the practice of allocating advertising money to your campaigns to achieve your specific performance goals.

5 PPC budget management best practices

Now that you know what a PPC budget is, let’s discuss some PPC budget management strategies:

  1. Identify a profitability goal to determine your PPC budget
  2. Conduct keyword research to determine a realistic monthly budget
  3. Employ budget pacing
  4. Use the power of automation
  5. Use ad schedules if you have a limited budget

1. Identify a profitability goal to determine your PPC budget

This strategy involves some number crunching to make sure you’re allocating a PPC budget that will drive profits at a given time. It’s an essential first step so you neither underspend nor overspend.

Here’s how to do it:

  1. Determine the profit you want to make in a given period.
  2. Identify the following:
    • Average order value (AOV)
    • Gross margin percentage, with the formula:
      ((Revenue – cost of goods sold) / revenue) * 100
    • Target number of sales with your PPC campaign
  1. Calculate your PPC budget with this formula:
    (Number of sales * AOV * gross margin percentage) – profit
  1. Identify the customer acquisition cost (CAC) goal that enables you to be profitable.

Let’s visualize it with an example:

  1. Suppose you’re in the retail business, and the profit you want to make from your PPC campaign in a month is $7000.
  2. To calculate your profitable PPC budget and CAC, here are sample figures:
    • AOV: $300
    • Gross margin percentage: 40%
    • Target number of sales with your PPC campaign: 100
  1. Your profitable PPC budget is $5000 based on this formula:
    (100 sales * $300 AOV * 40% gross margin) – 7000
  2. Based on your PPC budget ($5000) and target number of sales (100 sales), your CAC from your PPC campaign must not exceed $50.

2. Conduct keyword research to determine a realistic monthly budget

Another essential first step in PPC budget management is keyword research. Make sure the keywords you want to bid for have enough monthly search volumes to produce the clicks on your ads.

Google’s Keyword Planner is an excellent keyword research tool that you can use to check for a keyword’s:

  • Search volume for a location you’re targeting
  • Competition level (to see if other advertisers are competing for the keyword)
  • Suggested Google Ads bid

It also suggests other keywords to target based on the keywords you’re eyeing.

3. Employ budget pacing

Budget pacing is one of the PPC budget management best practices that advertisers must do. Budget pacing is the practice of tracking and optimizing your campaigns to control the rate of spending. This process helps you achieve a target budget or performance goal by the end of your budgeting cycle.

“All our clients are added to a budget pacing tool that tracks their process through the budget period,” Rebekah Leach, WebFX’s Senior Internet Marketing Consultant, explains.

4. Use the power of automation

Ad platforms like Google and Meta have built-in automation tools to help you get the most from your campaigns.

Expert insights from webfx logo

Rebekah Leach of WebFX
Rebekah Leach WebFX’s Senior Internet Marketing Consultant

“Automated bidding strategies efficiently use budgets to ensure that we’re getting the most out of our investments.”

You can also use automated testing and reporting, which can help you optimize your PPC budget and monitor your spending.

5. Use ad schedules if you have a limited budget

Got a limited ad budget? Rebekah recommends using ad schedules to avoid wasted ad spend.

“If you’re in the business-to-business (B2B) industry, consider limiting your ads to show only during business hours when your ideal customer would be searching for your services or products,” Rebekah explains. “Make sure you adjust your budget to reflect that the campaigns are not running seven days a week, so you can fully use your PPC budget.”

Frequently asked questions about PPC budget management

Let’s answer some of your burning questions about PPC budget management:

Why is budgeting important in PPC?

Having a clear budget enables advertisers like you to spend within your means and profit from your PPC investments — no matter how small the budget is, even when you’re just starting. A PPC budget also enables you to calculate your cost per click.

What should you consider when setting your PPC budget?

When setting your PPC budget, a few considerations can come to mind. In terms of keywords, should you go for keywords in the top, middle, or bottom of the marketing funnel? Then, you may also wonder if you must run display ads instead of search ads.

Let’s go through them:

Keyword considerations

When choosing which keywords to bid for, keep in mind the following:

  • Branded keyword searches are excellent keywords for increasing your account’s click-through rate (CTR).
  • Keywords at the top of the funnel (TOFU) have higher costs and may result in lower quality score terms.
  • Keywords at the middle (MOFU) and bottom of the funnel (BOFU) may have more competition. However, they have higher quality scores. Searchers using these keywords are ready to purchase.

Display vs. search ads

Search ads are also known as “pull” advertising, while display ads are “push” advertising. As such, search ads are only shown to users who are searching for the offering or business you’re promoting. Meanwhile, display ads are ads that appear to prospects based on certain targeting parameters you set.

Choosing one over the other or using both depends on some considerations. If you have a large marketing budget, you may use both display and search ads.

However, if you have a limited PPC budget, consider using search ads to target only the users interested in your business and offerings. You may also opt for search ads if you:

  • Have a product with a short sales cycle: Display ads are excellent for remarketing. If your sales cycle is short, you may invest more in search ads over display.
  • Have prospects who urgently need your offerings: Search ads enable you to target prospects searching for your offerings.

Consider having more budget dedicated to display ads if you have a longer sales cycle or are remarketing to prospects who have previously visited your website.

Traffic attracted through PPC advertising yields 50% more conversions than organic advertising.

Are you leveraging PPC in your marketing efforts? Let’s get started.

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Implement winning PPC budget management strategies with WebFX

PPC budget management is important for all business sizes. By spending the right amount of money and implementing PPC budget management strategies, you’ll reap the returns of your investments and grow your revenue.

If you want experts to guide your PPC strategies, consider partnering with WebFX. We’re a full-service digital marketing agency that has helped our clients run 650 ad campaigns and drive revenue growth.

Our team of 500 digital marketing experts is committed to providing our customers with no less than excellent service — a personalized approach that suits your needs and budget aimed to grow your bottom line.

You don’t have to take our word for it — we have over 1,100 customer testimonials.

Plus, we have offices all around the globe! For example, we offer London PPC solutions, along with offering PPC services in Harrisburg, Fort Myers, Ann Arbor, New York City, and many more locations!

Let’s get started. Contact us online or call us at 888-601-5359 to speak with a strategist about our PPC services!

Cost Per Click (CPC) Calculator

Do you advertise on platforms that charge per click? Use our calculator and figure out exactly how many clicks will fit within your budget.

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Expert insights from webfx logo

Rebekah Leach of WebFX
Rebekah Leach WebFX’s Senior Internet Marketing Consultant

“Automated bidding strategies efficiently use budgets to ensure that we’re getting the most out of our investments.”

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