Choosing keywords for your PPC Campaign and Setting a Budget

Wednesday January 02, 2008

When choosing keywords for your either your SEO or PPC campaign. Quite often people tend to pick keywords that are just too general and not specific enough. This is especially the case with PPC campaigns.

If you end up choosing a very general keyword for your PPC campaign, chances are it is going to be very expensive per click and it won't take long for the amount to add up. By going with a more specific keyword, the cost per click is going to be lower, but also the search volume will be lower as well. But this is not a problem. All that will need to be done is increase the number of specific keywords with your PPC campaign. This way you are still keeping the number of people searching for your products and services the same while keeping your PPC cost per click down.

Determining a Budget and Max Cost Per Click

We'll use a conversion rate of 4% from search engine referrals. Next for this example we'll say that on average each sale brings in $100.00, and the profit from each sale is 30%, and we'll say that you're willing to put 50% of the profit back into the PPC campaign.

Conversion Ratio= 4%
Profit Per Sale=$100
Percentage of Profit Per Sale going towards PPC= 30%

Max bid per keyword=$0.36

As you can see from the example above, this will give us a maximum amount we can spend per click at $0.36. So, you can see that with every click, it depletes your available marketing budget and we need to choose keywords wisely. Choosing the top and most competitive keyword will very quickly run down your PPC budget and in the end it comes down to getting the most out of your marketing budget and increasing sales for your business. So hopefully you can see that choosing the biggest keyword in your field is actually not a wise investment for most companies.

More on Choosing Keywords

Choosing keywords for your SEO (organic) campaign and your PPC campaign are different, but they do have some similarities. If you have a new website on the internet, then with your SEO campaign, you are not going to be able to get rankings for the top and most competitive keywords in your field. It will take time to achieve this, in some of the most competitive industries, it will take a very long time. With the companies that have been online longer, they will be able to target SEO keywords (these are from the free search engine listings) that are more competitive. So essentially, new websites on the internet will choose keywords that are similar to the keywords they have with their PPC campaign, and as a bonus, with Google analytics tracking, you can see which keywords are actually leading to a sale, and you can stop bidding on keywords that don't result in a sale.

Working with a set Budget

Lets take another simpler approach. Lets say you have $150 per month budgeted for your PPC ads, and we are dealing with the ever so popular gift basket industry. We need to make the most out of the allotted budget and get as many clicks as possible on relevant keywords. For each of the keywords, we'll say that this is the only keyword we are bidding on, and we have $150 budgeted. As you can see, if we went with wine gift basket, just after 60 clicks, our budget would be used up, going with a more focused keywords such as gourmet wine gift basket or cheese wine gift basket, you can double the amount of  traffic for the same price.

As you can see, we can go with more refined and focused keywords that will generally have lower bids, and we can broaden the amount of keywords to reach a desired number of clicks/traffic.

wine gift basket
$2.50 = 60 clicks on a $150 budget

gift baskets
$1.77 = 84 clicks on a $150 budget

gourmet wine gift basket
0.89 = 168 clicks on a $150 budget

cheese wine gift basket
$1.11 = 135 clicks on a $150 budget
 

So, is this it? Nope, sorry to say it doesn't end here. The next thing is writing effective ads, we need to make sure that the ads will draw people in and want to find out about your products and services. Getting the rankings is just part of the step, we need to make sure the site/page is working to its best and properly getting people to take the next step on your website.

Gerard Manning
Search Engine Placement Specialist
Search Engine Marketing Agency :: Manning Search Marketing