So I’m back again, working on the last part of my internet marketing project. I’m just so stuck on the budget because I have no idea how to pick numbers and then justify them. I found a great site to estimate the cost of my keywords, but it makes me enter a daily spending limit. Any ideas on what a normal budget per day would be for keyword pricing? (By the way, my company is a multimillion dollar industry)
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on Mar 11th, 2009 at 1:42 pm
A few guidelines:
1. Make sure you are not spending more per lead than you make on a sale. Seems obvious but you’d be surprised.
2. Figure out of how many leads you need to finalize an actual sale and how much profit you make from that sale.
3. Make sure you are not spending more per lead than the amount you make on a sale divided by the number of average leads you need to make a sale.
Example:
You’re selling a product that costs $5.
For each item sold, you make a $3 profit.
After analyzing the number sales that resulted from people clicking your ads against the total number of people who clicked on your ads, you realize that for every 10 people who click on your ad, you make 1 sale on average.
If your data is solid and spanned over a long period of time you can eventually assume that for every person who clicks on your ad you make a $0.30 profit.
Therefor you should be spending less than $0.30 per click or you’ll be losing money.
I’m assuming the only purpose of those ads is to generate sales and not brand awareness.
As for the daily budget, it depends on what your company can afford and its marketing strategy.