Adwords Tips: How Much Should I Spend Per Month On Pay Per Click?

“How much should I be spending?” is one of the first and most frequent questions we get from potential clients. In that question are two separate questions that the client wants to know, though they are rarely able verbalize it:

1) What should I be spending per month
2) What will my setup costs be if I don’t already have an account.

What Should I Spend Per Month?
There are several ways to answer this question. You may want to consider these answers before you hire a pay per click management team. Some popular answers to this question are “what you can afford to lose”, “it depends on the industry”, and “about whatever you think you can afford to spend”. Those are all reasonable answers for some clients.

For advanced businessmen and women I think the following answer is better: “If you could buy one dollar bills for $.99, how many would you buy?” Obviously you would want to buy as many as possible, or spend infinite amounts. Even though margins are low (in this example), the more you spend, the more you make.

Would you still be interested in this deal if you had to pay someone else to arrange this service for you? Again, the answer would be yes. While this eats into your margins (again), you are still in a position to make a ton of money if you put up the money.

Lets bring this back to pay per click. Due to advances in tracking technology, we are able to calculate the amount of money you are spending and the amount of money you are making directly from pay per click ads. If this is a positive number, it is no different than the above example, where you are buying dollar bills for $.99.

This advice has is limitations, but not in the ways you might expect. The obvious limitation is that there is not an infinite supply of customers. This manifests itself in the following way: the more you spend, the higher the cost of acquisition, which will eat into your margins. However, if you do not yet have a solid account, you probably do not need to be concerned about this.

Setup Costs
The other limitation to this advice is that it will cost you money to get your account to a profitable state. Accounts are rarely profitable on day one. You will have to invest some money upfront in your advertising, just like all other forms of advertising. This cost varies from company to company. A pharmaceutical company that advertises to every country will pay a lot more than a mom-and-pop button-making shop that serves only San Diego.

Thus, there are two variables to keep in mind that will affect your startup costs (not to be confused with “setup costs”, which is the cost your ppc company charges you to setup the account): How competitive your industry is and how large the geographic region you want to advertise to is.

Adwords Hack Works Around Current Missing Adwords Feature

One feature that is surprisingly missing in Google Adwords (as of 2010) is the ability to allocate a different daily spend to each day of the week. Imagine the following scenario:

An advertiser spends $100 every day of the week except for Wednesdays. On Wednesdays, the company spends $250. Currently Adwords does not allow you to easily account for this scenario. The closest they come is Google offers you the ability to bid a certain percentage higher or lower on certain days.
That is not what we want.

We could wake up at 12am on Wednesday and change the spend from $100 to $250 and then change it back at midnight. However that seems like a lot of work, with not enough return.
However, there is another way. An Adwords hack, if you will. It ads a lot of complexity to the account, so I only recommend this solution for advertisers that anticipate a great discrepancy in daily spending (based on the day of the week).

Here is how it works: (We will pretend you have an account with one campaign for simplicity sake.)

1) Turn off all spending on Wednesdays by bidding on keywords at 0% on Wednesdays.
2) In Google Adwords Editor copy the campaign and repaste it. Rename the new Campaign “Wednesdays”.
3) In the “Wednesdays” campaign, turn off spending on all days except Wednesday. Set the daily spend to $250.

The result is that campaign one will bid $100/day mon, tue, thur, fri, sat, sun. Your new “Wednesday” campaign will bid on the exact same keywords on Wednesdays but the daily spend will be $250 on Wednesdays.

You can repeat this process for multiple campaigns if you have more than one.

Ideally, this seems like a feature that would be should be addressed by Google’s people. Perhaps it could be added to the interface to save time and avoid confusion.
If you need help with this procedure contact me.

Top 10 ways to Generate Keywords in Pay-per-click

There is a process for finding ppc keywords. Here are the top methods that I use to find keywords. This is not a list on how to find good keywords (we’ll talk about that next time) it is simply a list on where to find keywords that are relevant to your brand.

The List

1) Common sense-This one is often overlooked. If a grocery store solicited my help I know a ton of their keywords because I have seen a grocery store.

2) Keyword tools- Google Adwords Keywords tool and Yahoo both have free keyword tools with real data from searches people have performed. There are also good paid alternatives.

3) Website analysis. Look at the content of the webpage. There are also tools that can extract that data. The navigation and breadcrumbs can be helpful.

4) Competitors- Look at the content of the webpage of the competition.

5) Yahoo’s search home page- do a couple “bad” searches and Yahoo will show a list of related searches. Those are keywords.

6) Analytics-In your analytics. You are running analytics right? It will send you the keyword people are searching for when then used a search engine to get to your site.

7) Internal search-what are people searching for on your site? Those are keywords.

8 Competitive intelligence reports-Companies like Compete.com sell information on you and your company that may be useful.

9) The company-I listen to the language the stakeholders and employees use in our correspondence. Also, it never hurts to ask them if they thought I missed anything, but that is always at the end of the keyword expansion phase and campaign building phase.

Perhaps a new product might come in or a new corporate trend might develop that is outside the scope of analytics.

10) My experience-I have built umpteen campaigns and I have a certain feel for it.

(You may only recreate portions of this list if you keep the text and links unchanged and attribute the list to RoseOspreyMarketing.com.)