Better PPC budgeting through the pandemic.
Paid advertising is a broad topic that’s constantly evolving, so it can be hard to keep up. If you’re new to digital ads, run them but want to improve, or you’re an expert in pay-per-click ads, this article aims to help you manage your budget more effectively during this difficult time.
Although it’s easy to get drawn to the more attractive aspects of PPC advertising, it can be more impactful – and more profitable – to take a look at your budgeting.
Whether it’s a new ad type, a new channel or some new update to familiarise yourself with, there’s always something new to explore. Analysing your budgets can quickly become a low-priority task, especially if you’re running multiple campaigns across different platforms.
The good news is that spending some time to review your budgets at the beginning of the month could save your company money, or improve results. Here’s how you can improve your PPC budgeting during the pandemic.
Forecasting can feel like a stab in the dark for a marketer. Why guesstimate something you can’t predict? It’s true. You can’t accurately predict the performance of your ads, so why spend time trying to?
An educated guess can help you make smarter decisions about where, when and how to spend your advertising budget.
Google Keyword Planner will help you estimate traffic around your key terms, while news outlets and social media can also be useful for understanding what’s going on around you and what’s important to people.
If you read our ‘How COVID-19 is affecting your marketing’ post, you might have noticed that the search volume for dumbbells reached an all-time high a few weeks into the pandemic. If sports stores caught on soon enough – by listening to the concerns of their audience (gym-goers) on social media – they could have run some ads to claim the lion’s share of that traffic before their competitors.
You should also use MoM and YoY performance trends to forecast your ad performance. Is there a traditional uptick in search volume that you should hold off for? Which type of ads have been successful at this time of year in the past?
Spend some time thinking about what’s coming and check at the end of the month to see how far off your predictions you were. See what you can learn from this and how you can adjust to be a bit more accurate in the future.
It’s easy to know where you are at any given moment with PPC. You have custom dashboards, reports and visual tools to help you understand what has happened. But what about predicting where you will be at the end of the month, or the end of the quarter?Projection worksheets can be created in Google Sheets or Excel and used to project various value-based metrics at the end of a period, like the end of the month in our example.
To come up with your projected performance values – like clicks, conversions and CPA – you take the results from the previous 7 days, divide by 7 to give you the daily result and multiply the daily average by the number of days left in the month. The result is then added to your month to date stats to give you your projected performance at the end of the period. To make this repeatable, you’ll need to use the following formula:
(Past 7 days/7 * No days left in month) + Month to date stats = Projected performance.
Let’s say our budget for this campaign is £100,000. We may have started the month wanting to spend £80k on Google and £20k on Bing, but given the performance we’ve seen so far and the difference in CPA, we decided to shift our budget to maximize the available volume on Bing and spend the remaining budget on Google.
Adopting a flexible approach based on performance is more apparent when you forecast what performance would be like if we stuck to the original budget vs the current projections.
By shifting our available budget from Google Ads to Bing Ads, we’ve saved £2.5k and increased conversions by 164 at a far lower CPA.
Picking the right budget type.
Each digital advertising platform has its own budget setup. Facebook uses Daily Budgets and Lifetime Budgets, whereas Google Ads uses Campaign Levels or Shared Budgets. The budgets all work slightly differently. You should take some time to understand the benefits and drawbacks of each budget type and consider which one is right for you.
The budget you choose will depend on your campaign goals. As your business evolves through the year, so will the goals of your campaigns, so it’s important to check back in. Too often marketers will stick with using one type of budget because that’s what they did last time.
This is more of a quarterly check-in than a monthly task, but it remains important.
The importance of flexibility.
If you’re forecasting results, planning your campaigns and assigning budgets to different channels or campaign groups based on these forecasts – great. But your forecasts aren’t definitive. Things change rapidly. And you will need to adapt promptly to maximise your returns when running digital ad campaigns.
Being inflexible – or only checking and not updating your campaigns – can prevent you from maximising your results.
As we saw in the projections example above, we wanted to get the most from our monthly budget, so we did some projections to work out where to assign the remainder of our resources after noticing some interesting trends. By using the projections formula, we were able to make changes which delivered approximately 164 conversions for £1.91 less per acquisition. A great win for being flexible and able to respond quickly.
Consider the cost of results.
It’s rare that a PPC campaign pays for itself within the first few days. At times you may feel like you’re spending too much money and won’t generate a return on your investment. It can feel like money is being wasted. But just because your campaign is not profitable right away doesn’t mean it won’t ever turn a profit, and there are a few things to consider when working out if you can afford to run a profitable campaign:
- You need data to test your campaign. It’s only natural to be conservative with a campaign to begin with. You don’t know if it will work so you decide to set a low daily budget and see how things play out. While this can be a good precautionary measure, it may also damage the long-term impact of your campaign.
You need data to optimise your PPC efforts. That might mean spending more money initially. The downside is that this could result in high spend with a low gain, but you are essentially paying to generate valuable insight to optimise your campaign and improve results in the long run.
- Prioritise your platforms and start with the most likely to succeed. This comes back to flexibility. If your campaign isn’t performing well on Platform A – which you thought would deliver the best results – then shift to Platform B. But make sure you prioritise the channel/ad format you think will work first.
Budgeting is never going to be the sexiest topic in PPC. But during times like these where everyone’s keeping an eye on spending and businesses are trying to optimise across the board, optimising your PPC budgets can come in very handy. Afterall, businesses cannot afford to discontinue their new business activity, but it is possible to optimise performance and reduce spend on digital campaigns.