On Thursday, September 27, 2018 we got together with Hanapin Marketing for another great webinar collaboration! In case you missed it, you can get a copy of the recording here and check out #thinkppc on Twitter for all the live insights.
The style of this webinar was a little different than usual. This time, it was more of an open forum discussion about all things budget between two knowledgeable PPC experts, Marc Poirier, our Co-founder, and Diane Anselmo, Associate Director of Services at Hanapin.
The discussion started off with the big questions:
So let’s dive in and find out what the experts had to say about the who, what, where, why, and how of budgeting – just in time for budgeting season!
What to Invest
One of the first questions addressed a common pain-point for agencies thinking about their budget: what’s the minimum you have to increase your budget every year to keep up with competition?
First, determine your minimum increase by looking at what the competition is doing. Use tools like Spyfu, Crayon and others to give you some competitor landscape insights. If you see more and more of your competitor’s ads, you could make the assumption that they are stepping up their game. And if your competitors are stepping up, you might want to increase your budget too.
However, you may end up paying top dollar in order to improve performance. Be sure to measure your ROI closely as you ramp up so you don’t end up in an unpleasant budgeting situation at the end of the year. Also take into account the general increase in CPC year over year.
Where to Invest
The problem with putting all your eggs in one basket is:
- You may keep even poorly performing campaigns running simply because you don’t have anything else generating money or to diversify your budget with
- You might not work on different parts of the funnel, which means you’re leaving a lot of money on the table
It’s a good idea to replicate your best ad groups in other places like Bing ads to see if they perform. But it all comes down to people being afraid to invest in platforms they don’t understand or aren’t comfortable with. This can also be true for platforms that haven’t proved themselves yet, or don’t have enough users to drive statistical significance to be able to say if the strategy will work or not. Sometimes you have no choice though, if you have a Japanese customer base, you may need to invest in Yahoo Japan as well for example.
Who to Invest in
There can be uncertainty about whether to invest in your own branded ads because it’s seen as a waste of money. There could also be uncertainty about which competitors keywords to bid on or even which products or brands to prioritize. A question we get a lot is, ‘should we run branded campaigns?’ The answer is yes! Buying competitor ads is a bit more of a grey zone, many people are either for or against it. Both decisions often end up depending on what the boss thinks is best.
But what if you have multiple brands? You have to ask yourself some essential questions, like:
- Which brand performs best?
- How is the business divided?
- Which division has the best performance?
Let’s say you have five brands in a company segment and one is performing poorly. Try reallocating budget to the other four brands in that same division.
It’s important to invest your money in the places it will perform best, but be careful if you’re all pulling from the same bucket.
When to Invest
This is always a more difficult question to answer, as every business is unique and faces their own set of challenges, including seasonality.
Your best bet is to use historical data to see when to increase PPC bids. The data will illuminate past seasonal and holiday trends that could have an effect on your budget.
How to Invest
STEP 1 – Get as much information as possible on the business and performance
You need to understand your (or your client’s) business and the audience fundamentals. If you don’t have a firm grasp on the ins and outs of the business, spend time with your clients so they can get you up to speed on the most important aspects (unit costs, targets, revenue, resources available, etc).
Make sure you fully understand the relative roles of everything. Take what you’ve seen in terms of historical data and model a plan for the year to come. Take a look at average CPAs and other benchmark metrics to get a sense of what you’ll pay next year.
STEP 2 – Have a strategy for the year
Start by asking yourself what it is that you’re trying to accomplish. Do you want brand awareness in a new market? New lead goals? To increase revenue for this make-or-break product?
The goals have to be super clear so you can actually meet them. Work backwards from your objectives, then come back to your budget to say, ‘if we’re going to accomplish this, we’ll need this much money to execute it’.
STEP 3 – Tactics
Ask yourself:
- What audiences am I going to target and when?
- How often do I run campaigns in order to get the best returns?
- How do these things compliment each other?
Demonstrate how your actions will create outcomes, but be sure not to blow your budget too fast. If you have any uncertainties, spend slowly and test one thing at a time.
Do your best to validate assumptions with any data points you have. Ultimately, even if you’re experienced, trying new things like ad copy, branding, etc, carries its own set of risks. There may be a lot of unknowns, but risks do need to be taken sometimes in order to grow.
STEP 4 – Get the money
Go get the money! Be prepared to sell your vision to the people who control the purse strings. Don’t be afraid to pitch your boss if you have a solid data-backed argument to make.
Pro tip: put aside a “secret” 20% of your budget at the beginning of the year for unforeseen opportunities or changes that might come up. Don’t worry, there’s always an opportunity to spend it, even if it’s off the radar at the moment!
Tools you’ll need to execute a budgeting plan:
- Analytics (Google or otherwise, whatever is working for you)
- Google Keyword Planner
- Google Trends to see how things are shifting throughout the year
- Sales reports from a CRM or billing system (Where did money come from in the past? Where have you seen success?)
- SEMrush/SpyFu/Crayon and others for competitor insights and keeping tabs on your own performance
- SPREADSHEETS! Pull all the data into a shared Google Sheet or Excel
- Acquisio (for bid and budget management and cross channel attribution)
- Hanapin has proprietary tools and spreadsheet templates that can help as well
- Check out competitors in Salesforce, set up Google Alerts, and check out Auction Insights
- Alexa can give you PPC traffic estimates
- In the worst case scenario, hire a reputable firm
Pro tip: track your budget progress throughout the year by putting all your budget assumptions into a spreadsheet with your columns for each month. Tally your columns of projected versus actual spend each month. If you see that you’re way under or way over, set up meetings immediately to reset your budget and see where you need to make adjustments.
Plan For Your Success
When it comes to the 4 W’s and 1 H of budgeting, it’s all about knowing how to measure your own success. Data will get you everywhere now and in the future. Knowing what worked for you in the past means you can replicate it in the future. Being able to attribute revenue to marketing channels will allow you to create an easier budget for next year, so measure everything! Then plan for an incremental increase to test ROI on new channels.
Having some flexibility in your budget to try new things will make sure your strategy doesn’t become stagnant. Use the tips above to help your company continue to grow next year! Happy (and healthy) budgeting season everyone!
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