Budgeting with an expected CTR

February 29, 2008 on 8:05 pm | In Questions and Comments | 1 Comment

Tony, I know in your book you recommend never budgeting more money than you are willing to lose. Believe me, I consider this some of the wisest advice in the book. However, my question concerns whether one can use a rule of thumb click-through-rate (CTR) for budget estimates.

For example, let’s say I don’t want to spend more than $150 per month on a campaign. So, on Google that’s roughly a $5.00 per day budget. But I’m beginning to get the feeling that the $5.00 per day budget doesn’t generate enough impressions with a small CTR to really risk hitting my budget.

Does it make more sense to use perhaps a $300.00 budget that will yield more impressions, get me more clicks, but still not really go over the 150 to 200 range on cost?

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  1. Matty,

    If you do as you suggest, most of the time things will go just as you hope. You will get more exposure quicker, without ever really reaching anywhere near your daily budget.

    BUT….

    That is only most of the time. Occassionally, a good ad re-write will get traction quick, and you can be surprised with literally thousands of clicks in a few hours. A good surprise if your EPC is higher than your CPC. A bad surprise if it is not.

    My advice is to exercise patience, and even though it takes longer, wait till you have confidence that your ad is profitable before scaling the budget higher than an amount you are willing to lose. You wouldn’t really spend the whol monthly budget MOST of the time. But if you run enough of these campaigns, it will happen, and it can be a VERY bad feeling if the return isn’t there when it happens.

    Tony

    Comment by Administrator — March 1, 2008 #

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