Budgeting is a time-consuming yet vital part of executing successful advertising campaigns. In the business of advertising, the old saying “You have to spend money to make money” is especially true.
However, you don’t want to blow through your budget in a matter of days or underspend because you’re afraid of going over.
Overspending can sabotage your return on investment, while underspending will limit your reach and results. For a happy medium of revenue, savvy advertisers must learn how to balance their Amazon PPC budget.
Set boundaries to manage what you’re spending rather than blitzing through your budget in a blaze of glory.
Amazon PPC Budget Best Practices
1. Look at your competitors
If you’re not sure what a realistic PPC budget is, look at what your competitors are doing. How much do they allocate per click? Is it per campaign? Per month?
You can use tools like SpyFu to check out your competitors’ historic PPC data, including their target keywords. This alone will give you a budgeting ballpark.
If you need to back up your budgeting needs for accounting, it has a higher likelihood of approval if you have competitor data in hand.
2. Focus on lead value
The goal of PPC advertising is to increase sales. Consider qualified leads while calculating your campaign budget. How many leads do you need to meet your company objectives? Make a budget based on this information.
Let’s say you want to bring in 100 new clients in 2020. Based on historical data from your CRM, you know that your average close rate is 15%. Statistically, that means you should shoot for 667 leads to get 100 clients.
If you look at your PPC data and see that it costs you $15 to get one lead, that means you need about $10,000 a month to reach 667 leads, or $330 a day.
3. Prioritize low-funnel keywords
If you decide to set a daily budget of $330, don’t spend it evenly across all campaigns. The most effective Amazon PPC budgeting considers the relative value of each audience, ad, and campaign.
To put it another way, don’t give each keyword on your list the same amount of spending power. You want to get the most bang for your buck with your budget.
Focus on low-funnel keywords for buyers in the Consideration or Decision stages rather than treating everything identically. These leads are more valuable to you than a buyer in the Awareness stage who isn’t quite ready to buy.
4. Spend all of your budget
Coming in under budget may appear to be a good thing, but advertisers need to spend as much of their budget as feasible. Your employer set aside that budget for a reason; the money is there for the taking, so take use of it!
Use those extra bucks to extend the life of your campaigns if you’re underspending. Consider a cart abandonment, call extension, or retargeting campaign to get the most of your advertising budget.
It’s also good going over your campaign settings again. Make sure you’re not restricting your targeting too much in the name of saving money. You still want enough people to see your adverts.
Related Post : How To Get The Best On Budget by Managing your Amazon PPC
5. Spend more where it matters
What are your objectives? You should spend your budget dollars on a high-level, awareness-driven campaign if you want to gain more impressions. However, if you want to increase conversions and sales, you should use Amazon Ads with a high level of intent.
Every company is unique. What matters is that you understand how to spend your money sensibly. Consider the following criteria to stretch your ad dollar further:
- Adjust with the seasons: When are customers most likely to purchase your product? If you sell Christmas sweaters, for example, Q4 accounts for 90% of your earnings. To get the most out of your ad spend at the proper moment, prioritize your money according to these buying cycles.
- Successful products: What are your best-selling items? Instead of using PPC to promote your low-performing products, prioritize your most popular ones. These are the ones that will gain you the most immediate victories and provide the most ROI.
- Retention: Create a client retention campaign to keep them coming back. After all, advertising to existing clients is 7X less expensive.
The Bottom Line
Budgets for PPC are subjective. There is no one-size-fits-all solution that will work for every advertiser. Determine the correct budget for your campaign by looking at your goals and past data. Use these 5 best practices to get more budget control, increase profitability, and simplify the budgeting process.