Yago Paramo

Automotive Entrepreneur

Estimating Your Monthly PPC Budget

When deciding to invest in PPC marketing, one of the first questions that needs to be answered is, “How much should I spend?” Since most car dealers know that they need to get involved in PPC since nearly 90 percent of people us the internet when shopping for cars. However, most people don’t have a clue when it comes to deciding how much of their marketing budget should be allocated to PPC advertising. Here are some things that you should consider when determining your PPC ad budget.

Your advertising target radius
First, determine what areas you want your ads to target. Are you going to be advertising your product locally? regionally? nationally? Or globally? The wider you cast your advertising net the more traffic you’ll be bringing in and the larger your budget to be. Having a $5,000 dollar monthly budget may be adequate for a business with a 20-mile target radius around their business, but that same amount would be spread quite thin on a state or national level. In fact, that amount probably wouldn’t last before your first coffee in advertised on a national level.

What is the monthly search volume on your keywords
Do a little bit of keyword research and compile a list of the keywords you want to target and also the most popular keywords in your specific industry. Use Google’s Keyword Planner tool to find out what the monthly search volumes are for the keywords you want to target. Set the target ad targeting in the keyword planner to get the most relevant search volume information. If there are a lot of high volume keywords on your list then you’re probably going to need a larger budget.

What is the CPC of the keywords on your list?
In the same Keyword Planner tool you can also find the CPC (cost-per-click) for the keywords on your list. The CPCs can vary depending on the keyword match type, type of keyword, and your specific advertising niche. Your branded keywords such as your dealership name will be much cheaper than general industry terms such as “used cars”. Exact match keywords are cheaper than high volume broad match keywords. Dealerships that want to bid on terms such as “bad credit car loan” may need to pay a premium to compete in this highly competitive finance niche.

Now do some math

Monthly Search Volume x Average CPC x 3% CTR = Your Suggest Monthly Budget

The 3% CTR is just an estimate. The CTR will vary depending on the specific industry and the quality of your ad copy.

If you’re finding that the suggested monthly budget is way more than you can afford then you may want to consider some things such as weeding out some keywords or decreasing your target radius until you find a number that you’re comfortable with.