How to Create a Paid Search Budget – A Step-by-Step Guide

With Manchester being one of the biggest cities in the UK, competition for local business is heating up as more businesses extend from London to the ever sunny north. After working in London for a number of years, we know how much effort is required and how competitive localised search terms are. In this guide, we’ll break down how to create a paid search budget for your business in Manchester.

Whether you’re new to business, digital marketing, or Manchester, this guide will provide valuable insights and strategies to maximise your paid search budget and drive quality traffic to your website.

Let’s dive straight in.

How To Come Up With A Paid Search Budget?

Coming up with a budget without context can be just as easy as finding a needle in a haystack. Just like anything in life, you need to know other factors before you start the digging.

Understand The Importance Of Budgeting For Paid Search:

Paid Search can be a very lucrative part of your business if done correctly. Unlike all the guru’s that post on Facebook saying it’s really easy, it’s not, and you need to learn how to stick to a budget.

Let’s look at an example which we’re all familiar with: Mark has a t shirt brand where his t shirts are around £30 each. For simple maths sake these t-shirts cost £15 to make. In order to break even, he would need to spend £15 maximum per t shirt from a marketing standpoint. If Mark spends £20 to sell these he loses £5, if he spend £2 to sell them then he makes £13. Yes, this is a really bad business with low profit margins but that’s Mark’s fault. There are other tactics like pushing back profits for a few months to reinvest earnings. looking at lifetime value, building packages to increase AOV etc. The point to make here is before you run any campaigns you need to know, what the numbers need to look like and do your research into the Avg CPC’s etc in order for you to reverse engineer minimum conversion rates CPA’s etc. As you can see, there are a number of factors to look at prior to running, without this, you’re pushing s**t uphill.

Defining Your Objectives

If you don’t know what you’re trying to actually achieve, you’ll end up with nothing but a sore head and an empty wallet.

Where to start?
Take your business objectives and understand what you’re trying to achieve by running ads. Sales is not a business objective. What is a business objective could be: Achieve a 20% increase in revenue YoY with a focus on t-shirts, as these may have a high profit margin for you. If you’ve run ads before and they generate X% of your business revenue. work out what’s a realistic next target. Going from 5-10% is more realistic than 20-40%.

Review Market Dynamics: Trends & Insights for Growth

Please do your research first. What does this actually entail though?

• Monitor Trends: Keep a close eye on emerging trends in your industry. Follow industry publications, blogs, and social media channels to stay updated on what’s happening.

• Competitor Analysis: Analyse your competitors’ strategies. What are they doing differently? How are they engaging with their audience? Tools like SEMrush, Ahrefs, or Moz can help you gain insights into your competitors’ digital marketing efforts.

• Customer Feedback: Listen to what your customers are saying. Use social listening tools to monitor mentions of your brand and industry keywords. Pay attention to both positive and negative feedback to understand customer sentiment and preferences. Remember to reply to all feedback, even if you don’t like what you’re hearing.

• Data Analysis: Leverage data analytics tools to analyse market trends and consumer behaviour. Look for patterns in website traffic, social media engagement, and sales data to identify opportunities and challenges.
  
• Stay Agile: Digital marketing is constantly evolving, so be prepared to adapt your strategies. Be agile in your approach and be willing to experiment with new tactics and platforms. Don’t get stuck with a one track approach. However, don’t spread your budget across too many platforms otherwise you’ll never learn anything and likely not sell anything either.

Setting Realistic Expectations: Why It Matters?

The worst thing you can do here is tell people at your business you’re going to get X amount of sales. Everyone will hold you to it and you’ll look like a twit.

You need to have the business numbers down and then go and talk to some one who specialises in digital marketing, like us?

Good digital marketing agencies will ask you the following types of questions (these are green flags)

• What are your profit margins?
• How is your business currently performing and what are your current roadblocks?
• Do you know your ideal customer?
• Do you have a sales funnel and can you show us how it works?
• How much do you currently pay to acquire a new customer?
• Do you have a retention problem that needs addressing?

If they aren’t asking you these types of questions but start to say we’ll get you this or that, run. Nobody worth their weight will ever promise anything. We just can’t.

What they should be doing is looking at your current data, and if there is none, work with you to understand what’s possible based on your targets and realign these if it’s not entirely possible. This on it’s own is a green flag and should be appreciated.

We usually go into detail about break even ROAS, lifetime value, new customer acquisition costs and so on. If you’re having these types of conversations then you’re in the right circle.

Ongoing Optimisations & Monitoring Performance

In digital marketing, success isn’t just about launching a campaign and getting some sales—it’s about continuously refining and optimising your strategies to ensure you’re not just wasting money. Ongoing optimisations and performance monitoring are the keys to staying ahead of the curve and driving sustainable growth for your business. Here’s why they’re essential:

• Adaptability: Digital landscapes change all the time, with new platforms, algorithm updates and consumer behaviour constantly changing. By regularly monitoring your performance metrics, you can quickly identify shifts in the market and adapt your strategies accordingly. Please just ensure you’re monitoring the right metrics!

• Fine-Tuning for Success: Optimisation is about more than just fixing what’s broken—it’s about fine-tuning every aspect of your digital marketing efforts to drive better results. Ongoing optimisations help you squeeze every ounce of value from your campaigns.

• Data-Driven Decision Making: In digital marketing, relevant and clean data is king. By closely monitoring key performance indicators (KPIs) such as conversion volume, conversion rates, and cost per acquisition, you gain valuable insights into what’s working and what isn’t.

• Continuous Improvement: Digital marketing takes time and sometimes unfortunately work for some businesses. In the same breath, understanding what channel works best for your business can take time and budget too, however a good paid search marketing agency will give you direction based on your objectives. Regularly reviewing performance metrics, testing new ideas, and learning from both successes and failures are essential components of this journey.
  
• Ensuring Profitability: At the end of the day, the ultimate goal of digital marketing is to drive tangible, profitable results for your business. By proactively monitoring performance and making relevant optimisations, you can ensure that your marketing efforts are in the best position deliver a return on ad spend (ROAS) and contribute to the long-term success of your campaigns.

Presenting Results Back: Best Practices for Clear Communication

Remember what we said in point one about not promising anything to your business because when you can’t deliver you’ll look like a twit? Yeah now’s that time where you’ve got the cough up the results and not in a cr***y little excel doc either, management want a pretty dashboard, context and next steps. Plus they want a whole lot of green arrows to show you’ve made a tonne of money.

So what can you do?

Don’t over-promise, set realistic expectations, do your research etc. You get where this is going.

The main information management want to know is the following:

• Money in
• Money out

Sure, they want to know more than this in reality, but, ultimately they want to know what you got in return for spending their hard earned cash. So, where are we going with this? Metrics like impressions, ctr, cpc are all relevant metrics but don’t bother prioritising this data ahead of other information. Here at The Ad Lounge we build dashboards for all different types of businesses and objectives.

Leveraging Experience: Turning Knowledge Into Success

It goes without saying that partnering with experts will likely help you get to where you want to get to a lot more efficiently and smoothly that you would likely do on your own. Some people like to work with local businesses like us, a PPC agency in Manchester, however others are fine to work with a partner anywhere in the country.

However, there are a lot of cowboys in any industry so please ensure you choose properly and ask the right questions like we’ve briefly touched on above. If you choose to go with a paid search marketing agency in Manchester, ask them how they can help you, what they think you can achieve etc. Their answers to those will give you a good idea of whether they’re the right agency for you.

To conclude, there is no magic number you need to spend on advertising to make your business boom. What you do need is to understand what you’re actually looking to achieve and understand what a new business/customer is worth to you.

Conclusion

Now, if you’ve made it this far, we’ve got a request for you.

How do you currently generate new business and what monetary value do you assign for new customers who choose to work with you?

If the answer was word of mouth and you don’t know then you’ll likely need to sit down and work out the numbers we mentioned right back at the beginning. Keeping your current clients happy should be your number 1 priority, however you’ll never grow as a business without acquiring new business.

If you’re looking for an agency that can help your business grow then get in touch to see if we gel. We’d be more than happy to see what can be done to grow your business.

Thanks,

The Ad Lounge