PPC costs are influenced by a range of variables. If you’re interested in PPC for your business, you’ll need to set a budget you feel comfortable with, and understand the pros and cons of different PPC strategies. The type of PPC campaign you opt for can also affect the ROI (Return On Investment) you see from your ad spend – and different PPC campaigns are better for achieving certain goals.
Our guide to PPC budgeting will help you understand how much certain PPC services are likely to cost, and which are going to be most useful to your business goals.
Factors that affect PPC costs
Optimising and budgeting for your PPC marketing starts with understanding what different factors affect PPC costs. There are a few elements to be aware of.
1. Keyword competition
If your PPC campaigns centre around high-demand, competitive keywords, these will usually cost more to bid for.
This is where a well-planned marketing strategy from PPC experts can make a huge difference. Targeting less common, but still highly effective, keywords will lower the potential cost of PPC campaigns. Being strategic with your PPC budget helps it go further.
2. Quality score
When you create Google Ads, Google gives your ads a quality score based on several factors, including:
- The landing pages your ads link to
- The user experience of your website
The higher the quality score of your ads, the lower the cost per click (CPC). It will also lead to better ad placements, so your ads can be seen more easily.
3. Ad placement
This is where your ads will sit on relevant search engine results pages (SERPs). The top of the page is obviously the most desirable spot as it ensures the highest visibility for your ads – but placing your ads here comes at a higher cost.
4. Geographical targeting
Ad competition varies across different geographical areas. Businesses can save on wasted ad spend by geotargeting specific areas where their audience are most active or relevant (e.g. businesses with physical premises).
5. Industry trends
Industry trends, audience behaviour, and industry-specific events can all cause PPC costs to fluctuate. Industry trends can include:
- Seasonality trends: Busy business periods (e.g. Christmas) can drive up ad costs.
- Evolving consumer behaviour: More personalised ads might be needed to keep consumers interested.
- Platform changes: Changes to Google’s algorithm or functionality can affect PPC costs.
- Increasing competition: As more businesses invest in digital advertising, bids for popular key industry terms will go up.
How much to budget for PPC
There’s no ‘one-size-fits-all’ with PPC. However, the amount of budget you allocate to PPC directly affects the performance, reach, and effectiveness of your ads. The more you can budget, the more sales your ads will bring in.
The amount UK SMEs spend on PPC can vary widely depending on:
- Your business goals
- The size of your business
- Your industry
- How competitive your targeted keywords are
New businesses might start by spending between £500 – £2,000 a month to get the ball rolling, focusing on highly targeted campaigns. More established SMEs can start budgeting between £2,000 – £10,000 a month, which enables multiple PPC campaigns to be run, A/B testing of different ads, and a wider range of targeted keywords.
There is no limit to what can be spent on digital advertising. Businesses that operate in very competitive industries, or larger enterprises with bigger PPC budgets to play around with, benefit from spending more.
How to measure PPC ROI
Once you’ve invested in PPC, you’ll want to know your ads are generating a strong ROI (Return On Investment). There are a few simple steps you can take to do this.
1. Set your PPC goals
When setting up Google Ads, there are different metrics and events you can track. The best thing to do is know from the outset what goals or events are important to your business (i.e. what your ads are trying to achieve) and track metrics relevant to these goals. Google Performance Max campaigns are particularly useful for this.
Once you’ve established your goals, set a clear and realistic timeframe for achieving them. At the end of this timeframe, you’ll know whether your ads have provided a ROI.
2. Track conversions
Tracking conversions related to the goal of your ads – whether that’s filling in a form, purchasing a certain product, remarketing, etc. – will also tell you if your ads are reaching the right audience. If people are clicking your ads, but not converting, this tells you several things might be going on, including:
- Your ads are misleading
- Your website is unclear
- Your ads are targeting the wrong users
3. Use dedicated PPC landing pages
By creating a dedicated landing page solely for visitors who find your website through your PPC marketing, you can monitor the number of people clicking through on your ads. This will tell you whether your ads are impactful and attracting the right kind of traffic.
When we manage PPC campaigns for our clients, we proactively monitor Google Ad campaigns to ensure they are achieving the desired results. By A/B testing different ad campaigns to see what works best, we ensure you are getting the most of out of your ads – and your PPC budget.
If you’re new to paid search, our guide to what PPC marketing is explains the fundamentals before you invest your budget.
