- Monitor average cost per click (CPC)
- Review conversion and revenue targets
- Set an appropriate budget
- Re-evaluate your pricing strategy
- Monitor your return on ad spend (ROAS)
In the ever-changing digital landscape, it’s important for businesses to regularly review their budgets and performance targets to ensure that they are in line with current market trends and industry standards. This is particularly important for digital marketing campaigns, as costs and performance metrics can change rapidly. In this blog post, we will discuss reviewing budgets and performance targets.
Monitor average cost per click (CPC)
The first step to take when you want to review PPC budgets and performance targets is to monitor your average cost per click (CPC). The CPC is the amount that you pay each time someone clicks on your ad. If your average CPC has increased over the last year, it’s important to adjust your budget accordingly. This is because a higher CPC means that you’re getting less traffic for your money, and you’ll need to increase your budget to maintain the same level of performance.
Review conversion and revenue targets
Another important aspect of reviewing your budgets and performance targets is to review your conversion and revenue targets. Your conversion and revenue targets are based on the number of visitors that you expect to your website and the amount of money that you expect to make from those visitors. If your CPC has increased, the level of traffic to your website is likely to be lower than expected, and your budget or conversion and revenue targets may need to be adjusted accordingly.
Set an appropriate budget
Alternatively, if you wish to retain the same conversion and revenue targets despite an increase in CPC, then the other option is to increase your media spend budget accordingly.
For example, if you are now paying 25% more per click than when your budget was previously set, and you still wish to achieve the same number of sales, then the logical thing to do would be to add 25% to your budget in order to be able to achieve the same amount of traffic as when the target was originally set.
Re-evaluate your pricing strategy
If your Google Ads, Microsoft Ads or LinkedIn CPC has increased, it may also be necessary to re-evaluate your pricing strategy. This is particularly true if you haven’t increased your budget or lowered your conversion/revenue targets. By re-evaluating your pricing strategy (i.e. increasing prices by 25% to reflect increases in your click costs), you can ensure that you’re making enough money to cover your costs and maintain your performance targets.
Just beware that price increases can have a knock on effect on things like conversion rate, and so this option may still not produce the return that you are looking for.
Monitor your return on ad spend (ROAS)
Another important metric to monitor is your return on ad spend (ROAS). This is the amount of money that you make for every pound that you spend on advertising. Ideally you want to maintain a consistent ROAS over time, which is achieved by carefully balancing pricing strategy and available budget against the backdrop of price increases in traffic to your website and other changing trends.
In conclusion, ensuring that you review PPC budgets and performance targets is crucial for any business that wants to remain competitive in the digital landscape. By monitoring your average CPC, reviewing your conversion and revenue targets, re-evaluating your pricing strategy, monitoring your ROAS, businesses can ensure that their campaigns are performing at their best and that they’re getting the best return on their investment. By doing this, you can be sure that your budget and targets are in line with current market trends and industry standards.