Why the Correct Budget is your PPC's Best Friend

by Elliot Newton | Mar 13, 2020

How much is the budget?

One of the questions that we are asked most frequently is “how much should I be spending?” and this is an exceptionally difficult question to answer. There are numerous factors that this could be dependent on but your commercial factors are a good place to start.

A key element when choosing the budget comes down to aims and objectives.  Depending on the end goal, the emphasis could be on driving traffic to the website, enquiring on a certain vehicle or booking a test drive, meaning the budget is dictated by these goals. Naturally, the number of people who simply visit your site is going to be higher than the number of people who book a test drive, but it’s the value of the click that matters the most.

Check out our other article on tracking and attribution, as these two elements go hand-in-hand when it comes to successful PPC campaigns.

Below we will delve into the different options available when setting up a PPC campaign, but it’s vitally important to monitor results as much as possible, giving more clarity and in turn, better results. At AdFeeder, we push over 1,000,000 ads into Google every single day, and with our vast experience in this sector, we’ve learnt that variation is the key to finding the sweet spot of PPC advertising.

Let’s assume that you’re happy to pay £20 for a qualified enquiry form lead. We would set “enquiry form lead” as a goal in Google Analytics and import it into Google Ads. Day-to-day, we would optimise to get as many conversions as we can, providing the overall CPA is £20 or less. 

In the above example, providing there is no limit to the number of leads you can manage, the amount you wish to spend is entirely a question of your internal budgeting. From our perspective, the more leads we can bring, the better.

This model also allows for commercial flexibility and for boosting (or reducing) spend when it may be commercially viable to do so. During a sale period for example, you may instruct us to increase the cost per goal target from £20 to £30. This allows us to increase bids if required to get more volume again, providing the cost per lead target of £30 is met

Starter budgets

If you’re just starting out in paid advertising or if you don’t have a predetermined view of what your cost per enquiry should be, then we typically recommend a starter budget of around £500 per dealer location per month.

Using this method, the results will be linear and very specific to the task. However, this method won’t return much of audience learning, of how they navigate the internet and engage with advertising will be acquired – making smarter; more sophisticated; and higher converting campaigns.


Discovery budgets

One of the challenges with a budget based purely on goal conversions is that it allows very little room to experiment, or try out new techniques and new features as they are introduced. Clearly, as an automotive specialist we are making very calculated decisions about the features that we employ on your behalf and it’s critical to the optimisation process that we can adopt new strategies, as they become available.

For that reason we also recommend a “discovery budget”, that is set aside for this type of activity. We would usually recommend allocating around 15% of your budget to discovery.

Enjoyed this article? Why not check out our other work here.

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