A/B testing is a powerful way to optimize your SEM campaigns and improve your ROI. But how much should you spend on testing different ads, keywords, landing pages, and audiences? In this article, we'll show you how to budget for A/B testing SEM campaigns without wasting money or missing opportunities.
SEM is a competitive and dynamic field, where you need to constantly monitor and adjust your campaigns to stay ahead of the curve. A/B testing allows you to compare two or more versions of your ads, keywords, landing pages, or audiences and see which one performs better in terms of clicks, conversions, revenue, or other metrics. By doing so, you can identify the best practices and strategies for your niche, target market, and goals.
Before you start testing, you need to have a clear idea of how much you can afford to spend on your experiments. A good rule of thumb is to allocate 10-20% of your total SEM budget to A/B testing. This way, you can balance the risk and reward of trying new things without jeopardizing your core campaigns. However, this percentage may vary depending on your industry, competition, and objectives. For example, if you're in a highly competitive or fast-changing market, you may want to invest more in testing to gain an edge or keep up with the trends.
Acknowledging the fact testing can bring a lot on the table. I respect marketers who keep it as a recurring practice to achieve best KPI goals on all the areas. 10% of the budget is good to start as the ROI would be double because you crack a winning variant & at the same time get rid of underperforming one.
The budget for each campaign should be large enough to achieve 20 conversions per day. Be sure the A/B test you run has equal budgets testing only one element at a time.
A good rule of thumb is to allocate 10-20% of the total SEM budget to A/B testing. The allocation can be changed depending on the performance. Be sure to test only one element at a time.
Once you have your budget, you need to decide what to test and in what order. The most important factor to consider is the potential impact of each variable on your key performance indicators (KPIs). For example, if you want to increase your click-through rate (CTR), you may want to test your ad headlines, copy, and images first, as they are the most visible and influential elements of your ads. On the other hand, if you want to boost your conversion rate, you may want to test your landing page design, layout, and content first, as they are the most relevant and persuasive factors for your visitors.
Identify the high-impact elements within your SEM campaigns that are most likely to influence performance and start testing with them first . Focus on variables that have a direct impact on conversion rates. Focus on one variables at a time to accurately isolate the impact of each change. You can alternatively Prioritize testing Variables across the marketing funnel, from awareness to conversion. This ensures a holistic approach to optimization, addressing every stage of the customer journey.
After you choose your variables, you need to set up and run your experiments. The best way to do this is to use a tool or platform that allows you to create, manage, and analyze your A/B tests easily and accurately. For example, you can use Google Ads or Bing Ads to test different ads and keywords within your campaigns, or you can use Google Optimize or Unbounce to test different landing pages and audiences across your campaigns. The key is to use a tool that integrates with your SEM platform and provides you with reliable data and insights.
Finally, you need to track and evaluate your A/B testing results and use them to optimize your SEM campaigns. The most important thing to remember is to test one variable at a time and run each test long enough to reach statistical significance. This means that you have enough data and confidence to determine which version is the winner and by how much. You can use a calculator or a tool to estimate how long you need to run each test and how many visitors or conversions you need to achieve significance. Once you have a winner, you can implement it in your main campaign and move on to the next test.