How Much Should Your Business Be Spending on Pay-Per-Click Advertising?

Navigating the world of digital marketing can often feel like traversing a labyrinth of confusing acronyms and conflicting advice. When it comes to Pay-Per-Click (PPC) advertising, not only do you have content to consider, there’s also your audience to think about - and your budget. Without a budget, you can’t start advertising, and it goes without saying that the more you put in, the more you’ll get out. But figuring out how much is too much and how much is enough is a tricky balancing act.

In this newsletter, we'll delve into the many nuances of PPC advertising, exploring the recommended spending on platforms like TikTok , Snap Inc. , YouTube , and Meta . We'll discuss costs, impressions, and the factors you should consider to optimise your advertising budget effectively. Let's demystify your PPC spending.

TikTok

TikTok has taken the world by storm over the last few years and offers a unique opportunity for businesses to reach a largely youthful, hyper-engaged audience.

With TikTok's advertising model, the minimum daily spend is around?￡20 per ad set. This means that for each distinct group of ads within your ad campaign, you'll need to allocate at least ￡20. Over a month, this can equate to a baseline suggested total spend of?￡1,000 or more. However, these figures are not set in stone. The actual amount you should budget for your TikTok advertising depends on several factors.

Firstly, the nature of your content plays a substantial role. High-quality, engaging content that resonates with the TikTok audience may result in better performance and engagement rates, potentially allowing you to achieve more with less. Secondly, the specifics of your campaign goals also impact your spend. If you're looking to generate broad brand awareness, you might need to invest more than if you're targeting a niche audience or driving a specific action such as app downloads or website visits. Lastly, it's essential to consider the competitive landscape. TikTok's ad space has become increasingly competitive, and popular time periods or demographics may require a higher bid.

Snapchat

Snapchat, with its dynamic and image-focused platform, offers an excellent channel for businesses aiming to connect with a savvy Gen Z audience. While Snapchat doesn't enforce a strict minimum ad spend, we recommend a daily budget of?$20 to $50 per ad?to ensure your content gains ample exposure, with a monthly allocation of at least?$1,000?being advisable for businesses that want to make a meaningful impact. Snapchat uses US dollars for budgeting, so be sure to check the exchange rate. But like all PPC channels, the exact amount you should invest in Snapchat advertising isn't a one-size-fits-all figure. It relies heavily on the specifics of your campaign and the nature of your content.

The content you produce for Snapchat advertising plays a crucial role in determining your budget. Content that is original, engaging, and aligns with Snapchat's casual and creative ethos may garner better engagement, potentially allowing you to achieve more with less investment.

Your campaign's objectives are also significant. If your goal is about generating widespread brand awareness, you may need to invest more than if you're targeting a niche segment or driving a particular action, such as app downloads or website visits.

As with any marketing campaign, it’s not just about objectives. The audience you aim to reach can also impact your budget. If you're targeting a highly sought-after demographic, you might face more competition, leading to higher ad costs. Lastly, the ad format you choose—whether that's Snap Ads, Story Ads, Collection Ads, or Filters—can affect the cost.

YouTube

YouTube, the world's largest video-sharing platform, provides an expansive space for businesses to connect with their audience. Unlike other platforms, YouTube doesn’t dictate a specific minimum or recommended ad spend, offering you a great deal of flexibility in deciding your advertising budget.

On average, the cost per view on YouTube?ranges from 10p to 30p, but this can vary depending on your targeting parameters. If you're running a campaign with a Cost Per Thousand (CPM) goal, where you pay per 1000 impressions, you might base your?daily budget on a ￡10 CPM. This equates to around?￡30 per day. To give you an idea of scale, if your aim is to reach approximately 100,000 views, your ad spend could amount to?around ￡2,000. But once again, the amount you invest in YouTube advertising should be determined by various factors.

The number of videos you plan to promote is a significant consideration. The more videos you have, the larger your potential budget needs to be to ensure each video receives adequate visibility. But be sure to balance quantity with quality – a few well-crafted videos may yield better results than numerous lower-quality productions.

The type of campaign you're running also influences your budget. Prospecting campaigns, aimed at reaching new potential customers, may require a larger budget due to the broader targeting required. Retargeting campaigns, on the other hand, focus on individuals who've already interacted with your brand, and may therefore require a smaller budget.

Meta

Meta is one of the most popular platforms for digital advertising due to its vast user base and sophisticated targeting capabilities. Encompassing Facebook alongside Instagram , Meta is a global behemoth with nearly 3 billion active users in 2022.

The budgeting approach on Meta is highly flexible, allowing businesses to set their own advertising spend. It’s not all about the money though - the performance of your ads can be influenced by the amount and quality of data you have at your disposal.

Typically, we’d recommend a baseline budget of around?￡1,500 per month?for Meta advertising, but this figure can fluctuate greatly. Again, the size of your company, your goals on the platform, and the stage of your business all play a significant role in determining your ad spend.

Data is everything for Meta, and is integral to making your campaign a success. That means it’s time to start collecting it. This can include data about your target audience, their behaviours, interests, and demographics, as well as data about what type of content resonates most with them. This initial data collection phase is crucial to inform your advertising strategy and budget.

The quantity and quality of content you have available also impacts your budget. More content can provide more opportunities for testing and optimising your ads, potentially leading to better performance. While the more is certainly the merrier, it's important to ensure the content aligns with your audience's preferences and interests.

The specificity of your target audience also matters. If you're targeting a very niche audience, you might need a higher budget to reach them effectively. Particularly if there's strong competition for the same audience. On the other hand, a broader audience might require less spend per user, but you'll need to ensure your message is still relevant enough to engage them.

Time To Spend Wisely

Determining your PPC advertising budget is a complex process, necessitating a deep understanding of your target audience, campaign objectives, the nature of your content, and the competitive landscape on each platform.

Remember, the numbers provided in this article are only suggested starting points. The best way to figure out the optimal spend for your business is by testing different budget levels, monitoring performance, and adjusting accordingly. Don’t be afraid to experiment and learn from your results.

Lastly, always bear in mind that digital marketing is a marathon, not a sprint. It takes time to build brand recognition and foster customer relationships. Continual testing, optimisation, and patience will be key to your long-term success.

Looking to grow your budgets and more importantly your sales? Our PPC experts can help you realise your goals and grow your business.

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• What Are The 7 Ps of Marketing and How Can You Use Them to Form Your Marketing Strategy?

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