Writing by Brick Marketing on Tuesday, 25 of March , 2008 at 9:37 am
When it comes to managing your Pay Per Click budget, there are several strategies that have been used in the past. One strategy that I’ve seen people use is to set a daily budget maximum. Let’s say $10. You know that if you set a $10 spend limit per day that you will max out at $300 for the month. That will be your upper limit. But you won’t even hit that if you don’t hit your daily limit. For instance, if you spend $5.41 one day, $6.83 the next day, then $9.52, and $2.46 the next day, and so on, then you’ll never hit your monthly maximum budget. That’s one way to control your budget, though, and it works.
A better way to control your ad buget, however, is with your Pay Per Click bid strategies. The first step to managing your monthly budget this way is to determine the upper bid limit. To do that, you have to bid as high as you can to determine what the highest bidder is currently paying. Let’s say you bid $10 for your keyword. It only takes a day if you set your daily budget at $10 because your first click will max you out. But you’ll know what the top bidder is paying because your actual click price will be one cent over that highest bid. If the highest bidder is paying $7.50, for instance, then you’ll pay $7.51.
After you’ve determined the highest Pay Per Click bid, you’ll next need to figure out where you want positioned in the line up. Do you want your ads to appear in the No. 2 position or No. 3? Bid according. If the highest bidder is at $7.50 and you want to be at No. 3 then you might have to bid around the $5 range. By lowering your bid price to $5, you can see where you fall in the line up. If you are too low then raise your bid; if too high then lower it again. If you determine that your ad placement is too low for your overall budget and you aren’t willing to risk your ad money on that concept then you can stop your ads before they cost you more than you’re willing to spend.(payperclickjournal.com)
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