One of the underlying principles when building your business is maximizing your revenue. If you are able to do this on a consistent basis, then you will make more money than everyone else. The thing is, very few people know how to actually do this. These are some common limiting beliefs as to what it means to maximize your budget:
- Buy the advertisement that gets the most clicks or impressions.
- Get rid of any advertisement that gets a lot of competition.
- Never lose any money, there’s no time for experimentation.
While these tactics aren’t ALWAYS wrong, they could be limiting your budget potential, therefore, we have developed some sure-fire ways in which will ensure that you are getting the absolute maximum out of your current budget.
Overnight Millionaire Syndrome
Warren Buffett has an interesting approach to investing. He says – “Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant.” The best way to maximize your small paid search budget isn’t by aiming to be an overnight millionaire. Even more realistically, many marketers aim to make thousands of dollars in their first couple of months. While anything is possible, it is best not to get into an “ego war” with another company – don’t let the market dictate what you pay – only pay for the actual value of a keyword. When people are attempting to get rich quick to solve their problems, it is in that moment where all the short term moves end up destroying their future efforts.
The easiest way to think about this approach is to think about the Toirtoise and the Hare. Remember, the goal in the beginning should be to simply break even. One may even experience losses when they are first starting the PPC campaign, however, in the long-run these results usually turn into large profit. When you hear stories of marketers who have achieved massive overnight success, know that it was only one of three factors:
- They got lucky.
- They found a mentor who told them exactly what to do.
- They had been experimenting and maximizing their budget consistently for a long period time before seeing results, most people don’t see the hard work behind any success.
Therefore, the best way to avoid spending more than what you need to is by creating small realistic goals in the beginning and SLOWLY progressing it into larger goals. Usually this statement reeks of mediocrity to many people, however, just like Warren Buffett said: “Successful investing takes time, discipline, and patience”.
Trim the Fat
Now it’s time to trim the fat of your paid search campaign. In order to do this, you have to find keywords that do not work. Some are very obvious, for example, which keyword does not belong:
- Cell phone chargers
- Cell phone cases
- Cell phone Bluetooth
- Cell phone reviews
Obviously, it is “cell phone reviews”, because the other three keywords represent cell phone accessories. The last one does not, it represents people looking for information, not buying a service or product. Therefore, we will want to add this to our negative list by inserting a “-” into the Google Adwords tool. Now the campaign should look a little like this:
This technique is not new, or advanced, but it is something that people tend to forget about. Many people don’t want to think “negatively”, however, in this situation it can save you a ton of money. After all, the goal is to trim the fat and to have a lean budget that only targets keywords that earn profit!
Bonus: Tools That Maximize PPC Budget
There are tools out there that will maximize your budget, however, in order to get the most out of these tools, everything must be measured. In order to know how to start tracking your keywords properly and their conversion percentages, it is recommended to check out Google’s comprehensive guide to conversion tracking: “Setting Up Conversion Tracking“. If you have measurable results into every aspect of your sales campaigns such as:
This is a small bit of advanced advice, but the effects of it are profound. Many people have used excel solver for things ranging from regular budgets, fantasy football, and more. Anybody who is familiar with “decision theory” or “micro-economics” will probably tell you how important it is to calculate the maximum utility when trying to maximize your efforts – otherwise you are doing everything by trial and error. If you want some advice on how to implement excel solver, there’s a great blog post by PPC Hero: “How to Use Excel Solver to Optimize Your Campaign Budgets“. This is the part where a great PPC strategy will take its maximum effect. Even though you have a small budget, you want to split it in half, that’s right, even though PPC gets you short term profits, the goal is long-term results. So let’s split the efforts into two parts:
- A small percentage of your budget should go into regular experimentation. (Just use enough daily cash so that you can get a complete picture of what does and does not work.)
- The larger percentage should be dedicated to budget optimization.
If you have a side effort that’s dedicated to learning and experimentation, not only will you be able to maximize your budget, but you will be increasing the maximum potential as well! Instead of thinking of experimentation as “sacrificing money”, it is better to think of it as using money to construct a higher ceiling in your bank vault so that you can store more gold.
In conclusion, you can maximize your budget by mastering these three sound principles:
- Avoid the “overnight millionaire” syndrome. Most people are always interested in the quick money, because they think that it can solve their life situation. However, the only way to really become successful is to view your PPC efforts as an asset & an investment. Know that it’s going to give you money in the long-run. So don’t be afraid of being the “tortoise”. At first, being the tortoise appears as mediocre, however, you will always win the race, many times by a LARGE margin.
- Trim the fat and get rid of keywords that you do not use, these can cost a ton of money, so when you are first starting, get rid of these asap.
- Have two efforts dedicated to pay per click advertising. Have an effort that is dedicated to continuous learning, and have one that is dedicated to maximizing your budget. This will create a steady increase in long-term revenue.