The idea behind Pay Per Click is to increase traffic to your website, and thus increase sales of your product or service. Deciding about a budget is quite crucial before you actually publish your ad. You should investigate what is the rate per click, and what is the keyword or specific keywords that will generate highest number of hits.
It is not necessary that a larger budget will mean getting more traffic; in fact it can turn out to be a waste of money if the clicks are not transformed into purchases.
How do PPC ads help in generating sales? When a user clicks on the ad, he goes to the landing page and over there finds out the product or service he was looking for. So, there is a good chance that he will become a potential customer.
The success of an ad is determined by the percentage of clicks that turn into registrants, then into leads and finally on how many leads are converted into customers. With an ad tracking tool, you can find out the number of hits your ad has generated per week; you can compare these results with a peak, if any, in the profits or sales.
On the basis of this evaluation, if you find that the ad is turning out to be a good success, then you can decide to increase the PPC budget.
The budget you choose will depend on the money that you can afford to spend in the ad campaign. The size of the budget depends on the scale of operations of your company or business. If you think that a high budget would better serve your site in getting leads, then go for it. In fact, Google and Yahoo are expecting an increase in ad budgets in 2012 because major companies are willing to allocate more money to pay per click ad campaigns.
For companies willing to spend more money on PPC budgets, Google, Facebook, Bing and Banner Ads are the most suitable PPC channels. PPC experts believe most of the budget should be allocated to Google and Facebook since they are the most popular ones.
It is a good idea to increase the budget for a local business, that is, if your brand is restricted to a single city, state or country. The search results will show your pay per click ad only within the area or radius where it is restricted to.
For example, if someone in Florida types ‘mobile phones’, then the ads will show the mobile phones company in Florida. Local advertising will increase the visibility of your business or company among the local community; so spending a high budget on it will not be a bad idea.
You should keep your advertising budget constant because if you keep changing it you will not be able to evaluate the results. A pay per click campaign will not be of any use when you keep paying money per click but the ad generates no increased sales. So keep an eye on your PPC success results!