PPC Bidding Strategies: Watch That Budget

Writing by Pay Per Click Journal on Monday, October 29, 2007 Comments Off

One of the first things you need to do when you set up your PPC account is establish a budget. But be careful. It’s easy to make a mistake and lose thousands of dollars because you didn’t budget your campaign right.

If your daily budget is set at $5 then you’ll be paying out $150 each month if you max your daily budget. Set your daily budget at $10 and it doubles. You need to ask yourself what you can afford monthly. If you have a monthly advertising budget of $1,000 and you’ve been given 20% of that for PPC campaigns then you only have $200 to spend each month. Setting a $10 daily budget is going to put you over that so you’ll need to lower your budget accordingly.

Another thing to think about is what you want to spend on your keywords. Look at the popularity of those keywords very closely. If a keyword costs your $10 then that is one expensive keyword. Can you fit it into your budget?

You’ll have to figure out what the first place position costs you on each of your keywords. To do that, bid as high as you can. If you know your keywords are expensive, you can bid $20 and see what you end up paying, but just do this for one day. By the end of the first day you’ll have received at least one click. But you will only pay for that click one cent more than the person who currently holds the top position. If they bid $12.62 then you’ll pay $12.63.

Now that you know where you stand, bid within your budget but bid as high as you can go to maintain a respectable position. If your highest bid, based on your budget, is only $5 per keyword and that gives you an average position of 15 while your daily budget is $5 then you’ll have to decide if that PPC campaign is going to be worth your effort. The most you can afford is one click per day. Is that going to pay your bills?

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