PPC Budgeting and PPC Revenue Forecasting

This method goes for already existing PPC campaigns which have some history.

Setting up Budgets for new PPC campaigns

If you start PPC activities from scratch, align closely with your PPC campaigner and based on his campaign structure carry out the budget planning. Based on the keywords’ traffic of the products and product categories and your market coverage you can see quite clearly how you would start your PPC presence.

Most of the cases you probably have a fixed budget and you try to customize your PPC activities for this. Then you know the budget and after some time, probably a year you will have enough data to make further decisions for budgeting and revenue forecasting.

Target those products which have the best margin and good availability with steady delivery conditions.

Probably at the first you shall target price comparison sites and when you have a feeling about the market then you could try Google Ads and Bing Ads ..

The Law of Diminishing Returns for PPC Budgeting and Revenue Forecasting

The Law of Diminishing Returns, as applied to pay-per-click advertising, describes the phenomenon where the effectiveness of additional spending on PPC campaigns tends to decrease over time if no further modification happens to the PPC campaign just raising the budget.

Initially, increasing PPC spending often leads to proportional increases in desired outcomes (like clicks or conversions). However, as spending continues to rise, each additional dollar invested typically yields smaller incremental gains.

This occurs because the most effective keywords and ad placements are usually targeted first, leaving less efficient options as spending increases further.

Fixed PPC budget and movable PPC budget

When you prepare a table with the campaigns’ names, budget spent and revenue earned, you will receive an overview over the months and you shall stick to the best ROI and keep that campaign running with that setting.

No more budget raise, no less budget received, but you have a fixed item on your list, which you can calculate on your budgeting item list.

Carry on filling into the sheet and at the end summarize the costs and the revenue. This is the base of your fixed budget and revenue forecasting.

The second part is the movable budget. PPC specialists have their plans on how to bring in more revenue, testing out old and new tactics.

How much money does the company have to proceed with the additional PPC tests? Is it fixed? Then the deal is done.

If not, then take an agreed % and add it to your yearly fixed budget. Hopefully some campaigns from the movable budget will be moving to the fixed budget and your revenue will raise also rise along with your expenses.