How to find your perfect Google Adwords budget

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I often hear from companies that they don’t know how much money they should put into their Google Adwords account. But let me show you how you will get your perfect PPC budget. Step by step.

First of all Google Adwords (or PPC) is not a cost – it’s an investment. So the question is how much money should you invest in your Google Adwords?

If you invest less than you should then you are losing sale right? You could have sold more products than you are doing right now. And if you are investing too much well then you will not get enough return on your investments.

Google Adwords is suggesting your bids and your daily budget – but Google Adwords has no ideas of your Average-Order-Value (AOV) or your Close-Rate (CR) or your business model.

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How to find your perfect Google Adwords budget

  1. 1. First of all Google Adwords (or PPC)is not a cost –it’s an investment
  2. 2. If you invest less than you shouldthen you are losing sale right?You could have sold more productsthan you are doing right now.
  3. 3. And if you are investing too muchwell then you will not get enough returnon your investments.
  4. 4. So you have to findYour perfect daily PPC budgetfor a new product.
  5. 5. for a new product• First you have to estimate how many sales you are expecting to sell.Remember to stay conservative – you can use the minimum number ofsales to stay in business. (Let’s say you need to sell 100 products everymonth).• Take a guess of your closing rate. If you have 100 leads how many of themwill actually buy something from you. Again be conservative and get moreprecise after some few weeks. (If you have a special product it could be 10percent or even more).• With the expected sale and your Closing-Rate (CR) you can nowcalculate how many leads you will need to make your sale right?
  6. 6. for a new product• Now estimate or calculate your target Cost-Per-Lead (CPL) – this is themaximum amount you can spend per lead. You can spend up to thislimit and still be profitable.• Now multiply the number of leads with the target CPL. This is howmuch money you can spend in one month on your PPC.• The last thing is to divide your number by 30 to get your daily budget –and now you are all done.
  7. 7. for a new product• So if you want to sell 100 products every month and your Closing-Rate is20 percent you will need 500 leads. Now if your target cost per lead is 5dollars – you will need to invest 2500 dollars every month. This will be adaily budget of 83 (2500 divided by 30). This is your perfect PPC budget.• And yes you will still need to improve your Google Adwords ads, yourCost-Per-Click, and your Conversion-Rates.
  8. 8. for an existing product• Now if you have an existing product you already know a lot about yourproduct. So you can use this information to get your perfect PPCbudget.• First set up your target for your monthly sales• Use your information about Average-Order-Value (AOV), Closing-Rate(CR) and Project Rate of Return (PRR) to calculate your Cost-Per-Lead (Now you don’t have to guess your Closing-Rate).
  9. 9. for an existing product• Simply multiply your target for monthly sale with your Cost-Per-Lead toget your monthly budget.• Divide your monthly sale in 30 to get your daily PPC budget.• And remember that your PPC is not a cost but an investment.
  10. 10. www.SeoCustomer.com

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