3 Common PPC Budgeting Mistakes to Avoid

3 Common PPC Budgeting Mistakes to Avoid

It’s January, it’s cold and you still haven’t finished your 2018 budget plans for your Paid Search Campaigns. Well, rest assured, you are not alone. Many of our clients as well as other companies running PPC internally are still in the process of determining their budgets. That said, there are a few easy mistakes that this article should help you avoid. This article discusses Google AdWords but is certainly applicable to other networks. So, let’s get started.

#1. Never assume your advertising environment will be the same in December as it is today.

The Google AdWords platform evolves constantly. Bidding options, targeting capabilities, quality score weighting, attribution, max bid rules, and so many other elements can and have changed over the course of a single year. But the biggest change is the evolution of how consumers search. Ever-changing consumer behavior keeps Google and practitioners like us on our toes.

While there is no crystal ball, you can keep an eye on key trends (like mobile growth, for example) to plan how budgets need to be dynamic over the year. A sweeping macro-level budget, such as, “We are going to increase spend across all networks 15% and improve conversion 5% to achieve our KPI of a 20% increase in conversions,” is weak at best. This medium is simply too dynamic to not afford it more detailed attention.

#2. All PPC campaigns are not created equal.

And treating them as such when setting your budget is another common mistake we see.

Most AdWords programs include campaigns for brand terms, non-brand terms and beta test terms. From there, campaign types run the gamut from RLSA and display to programmatic, video ads and more. It's easy to see how each of these formats is in and of itself unique, warranting its own bottom-up approach. Brand and non-brand keywords have different costs per click and are often held to different success metrics. Depending on your test campaign goals, you may need significantly more dollars to affect that outcome. The type of testing, as well as the frequency, also play a role. Executing several incremental tests (what the youngsters are calling A/B tests) has a different cost structure than several format tests would (aka MVT or Multi-Variate tests).

I could go on... The bottom line? It is to your benefit to take into account these varying campaign elements when setting a budget.

#3. Beware of static budgeting.

This one drives me nuts and I can’t believe I am mentioning it, but I see this consistently, even amongst otherwise sophisticated companies! Please don’t assume that if you have a $1.2M budget that it is going to be a flat $100,000/month across the year. That is not reflective of your prospects’ buying cycles, their research behaviors, heightened sales periods, trade-shows, and any other factor that might impact performance throughout a calendar year. Leverage your analytics as a guide to determining proper alignment between your budgets and your estimated search query volumes.

A final thought. For most of you, budgeting for 2018 consisted of or will consist of looking at 2017’s final numbers and making adjustments for any “known” events or campaigns. Instead of using last year’s budget as your benchmark (a rearview mirror approach), why not grab the binoculars and focus ahead to a more forward-looking outcome-based approach? To be succinct, focus on what sales and marketing strategies are driving to for overall lead counts, overall revenue, overall market share gains, etc. That desired outcome is what your budgets should align with. Unfortunately, this outcome-based approach is still foreign to many companies. More on outcome-based budgeting and other approaches in my next post.

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