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What should I pay for Google Adwords (PPC)?
As the operator of a DMA, we are often asked: How much should I pay for Google AdWords (PPC), Yelp or Facebook and Instagram advertising? It' s not just the Google Adwords editions that are affected. What should you invest to achieve new client outcomes? The answer to the how much you should be spending will depend on three factors:
Which are your targets for new sales and sales? What kind of audience do you need to get there? Stage One: What are your targets for lead or earn? Do you ask yourself, what is your aim for new sales or sales? And if the objective of winning leads is much greater than the actual results, the amount you need to pay on Google Adwords to accomplish that objective is just as important.
You will see in just one instant after someone has gone through the trial that they are often amazed at how much they have to pay to reach the target. According to them, they wanted to win 50 new clients per months compared to the year before. They are currently doing various guerrilla advertising policies and making various trade shows locally and last year they were experimenting with online advertising.
So let's see how we can get a real Google PPCudget to reach the target of attracting 50 new clients compared to last year. Stage two: How much does the visitor cost? Next in the estimation of the Google Adwords budgets needed to achieve your objective is to understand how much it will cost you to get the visitor.
At Adwords we estimate these costs on the basis of the cost per click for a keyword that we can find in the Google Adwords Keyword Planner. Searching for specific words with the Google Keyword Tool shows that the mean cost per click (CPC) for related words will be about $5.
Customer explained that he has a $1,500 per months cost base - assuming the cost -per-click ratio of 300 visitors. Generally, if your website is well landscaped, the rate of site convert (forms + calls) for a site for retailing service is probably in the 10% region (your miles vary).
When you are an e-commerce site, your site turnover rate is usually much lower, in the 1 - 2% area. To better comprehend this, take a look at the Google Analytics on your website. Calculation of website leads: At this stage, it's about how effectively you and your employees can convert lead into customer.
Operation is closely linked to the efficiency of your sales. In my collaboration with many different companies, my expertise is that their exchange rate when they receive a request by telephone or e-mail is between 50% and 90% (at least for consumer services). Totally new customers: Converting speeds in other non-Google canals are much lower, so you need to be wary of using this kind of logical approach on Facebook or Instagram adverts.
Because Google users are active in submitting requests, they are pre-qualified Leads - we know they have a high degree of interest because they entered a request. Clients who come from Facebook or other sources are not so prequalified, especially because they are not active in looking for your products or services because they are on the site for other people.
First, I build these kinds of basic Excel model, and then I modify the month to see how all my new clients are changing with rising or falling expenses. There are of course extended Excel spreadsheets that you can use, but in this case it is quite straightforward to diversify your spending to see how your new clients are changing.
Also, back to our clients who wanted 50 new clients per months - it is clear from this that $5 per click and the website convert rates together with the lead-to-customer convert rates, $1,500 per months budgeted will not reach their targets of 50 new clients per months.
Customer must pay over $4,000 a months to reach target. Whilst $4,000 can be a great deal for many small business, don't let yourself be held back - the point is to help you better comprehend what a sensible spending is to achieve your objectives. While you can buy anything you want, doing so now will give you a better feel for what you can get from your lead.
At the end of this last step is to ensure that your bottom line and your bottom line are in place, because if you don't, you need to take one of these actions - either improving your margins (increase prices or reduce costs), improving your website conversion rates, or improving your client base. In the following you will find two key figures, the ROAS (Return on Ad Expend) and the ROI (Return on Investment).
ROAS is only the revenue resulting from the expenditure diluted by the expenditure on advertising. $500*48 new customers)/$4,000 in Adwords, so $24,000/$4,000 = 600% ROAS. However, what about taking into consideration the cost of manufacturing these products? So, if the customer has 50% margin on $24,000 in turnover, in other words, it costs $12,000 in work or parts to make these sells, that's $12,000 in profits.
The Adwords cost of $4,000 is subtracted from the $12,000 profits, which brings us $8,000. Well, now that we've considered the cost of producing the sale and the cost of selling, the ROI is then ($12,000 - $4,000)/$4,000 = 200% ROI. The ROI as a key figure is better because it considers margin/cost of revenue, promotional expenditure and profits.
The real thing that ROI has shown us is that out of the $24,000 in revenues we have earned, we have spent $12,000 on making these revenues (labor and parts), and we have spent our $4,000 on our $4,000 in advertising dollars that have brought us 200% ROI. You can use this for every type of advertising canal. Adapting these variable will allow you to better understand how to be more effective, make more money out of your tactic, and most of all, make your business responsible.
Hopefully this has help you in answering the questions of how much you should pay for Google Adwords and get a month's salary.