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How budget strategy work ?

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How budget strategy work ?

In this lesson, we gonna learn together the basics of budget strategy.

What is the difference between traditional advertising campaign and online campaigns ?

The use of online campaign to promote a good or a service is much better for beginners. Why ? It’s easy for measuring performance and also control expenses. In addition, the time between initial investment and return is shorter. Google AdWords is flexible, you can change at any moment your budget. You must adapt your budget based on performance. More you gain, much you budget must be high.

When your campaign doesn’t work such as you wish, you have to isolate part of your campaign and remove it, if necessary.

When you’ve reach more customers, you are more profitable. That’s why it’s important for you to put more money for advertising. I can advice you to define a scale of budget  in order to prevent evolution of traffic on your website. Sometimes, there is more customers that you had expected, you could loose a lot of money if you miss them. If there is less traffic, it’s not important because you don’t pay more.

For Example : You have a daily budget of 100$, you can put a scale between 100$ and 150$. The traffic is very flexible, then be careful because you miss many customers.  At the contrary, you mustn’t put 1000$ because you are not protected against traffic sudden shift. Test each time by increasing a little bit to be sure that your settings are not harmful for you.

This strategy is not for every company read the following informations below :

Scale by performance is a good budget strategy for :

– Selling goods or services

– Sales team (generating leads)

– Subscription (signs-up)

Make this strategy only if :

– You are able to do an estimation of your conversion value (difference between the costs of advertising and revenues)

– You know, the time having your profits available to reinvest

– your Cost for serving new customers decreased

It is preferable not to do this strategy if you have cash flow limitations, sales tracking limitations or customers services limitations.

We have the same goal for our online advertising campaigns, its growth. It means that we are searching for profitability. There are 3 stages for an Adwords Campaign : Testing, Growth and Maturity

How to manage this 3 stages ?

1- Testing : After comparing performance data, you can test new keywords, CPC bids or Ad Combination. Don’t forget to compare costs and revenues to remain profitable.

For Example : If one keyword doesn’t work, remove it and create a new one.

2- Growth : When you have reached more customers, increase your Daily Budget, adjust CPC, remove non-performing keywords and ads. Go to “Budget” to know more about that. Google AdWords will give you a recommended budget to help you.

3- Maturity : Check that you are really profitable ! Now your budget is high enough to appear all the time, then don’t miss an eligible impression. You have to check also Costs, Profits and sales. All of these data must have a regular fluctuations based in search volume.

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