Creating an SEM Budget

Setting a search engine marketing budget is a unique process from any other type of marketing. As a general rule any type of advertising will let you spend however much you want, “Why not we’ll take your money”. That’s not how paid search works. In paid search you’re limited in what you can spend by the number of people searching for your offering. That’s a big indicator that search is its own beast. This article is going to breakdown how you should spend on search marketing.

1. Determine your Search Engine Marketing Goals

I’m sure your “Goal” is to get an immediate positive return on investment, but we need to think more granular than that. Think in terms of where you want to position yourself on the consumer’s purchasing journey.

In search marketing you can snag a consumer off the market at any process in their purchase decision. You can try to start at the very top of the funnel while the consumer is just in the very beginning of their information gathering stage. You can try to steal them, at the last minute when they’re just about ready to make their decision.

“What is search engine marketing?” – Top of the funnel, information gathering.

“Search engine marketing companies” – Middle of the funnel, service providers.

“Tegrity search engine marketing service” – End of the line, found a specific.

It makes sense to think that more intent driven terms are going to be more valuable to you, you’re probably right. They’re also more expensive in proportion to that increase value. So where do you want to focus your search marketing efforts? The very top of the funnel? The middle of the funnel? The last second grab at a key competitor’s business? Maybe a mix of all three? What should you do? Well, it depends. Every company, every market, industry, geographical region is going to have a different success at different consumer entry points.

2. What’s the search volume?

There are only so many searches for the terms you want to be found for in the geographical region you want to target. Maybe there are only a few hundred searches a day in for business consulting in Scottsdale, AZ, not very much room to spend money if you wanted to. Maybe there are thousands of searches every hour, you need to gain an understanding how much ‘inventory’ you even have available to purchase.

There are tools out there to estimate search volume, the best is going to be using Google’s keyword planner to get traffic estimates. Those numbers are going to be a good rule of thumb, but you truly won’t have an idea how those keywords perform in your market unless you start spending.

3. Developing the budget

You’re starting to see that setting up the budget isn’t a quick and easy process, but rather something you actively develop. I would usually recommend starting off with around 750-1000 so that you’re spending enough money to get enough data there can be statistically significant results to learn from. Now you want to spend as much money as you can. That’s right as much as you can, once you have the data letting you know what your expected return should be, step the spend up until you find your point of diminishing returns. Hypothetically you could find out every keyword that gives you a return on your ad spend and capture 100% of the impression share for those terms. That is your ad shows up every time possible, because you know the expected results.

Now, all of that last part is easier said than done. You need to have the proper systems in place to track the value of your results so that you’re viewing a full picture of what the impact of your search engine marketing spend is. And setting up and understanding how to make the necessary changes taking lots of time and experience.

So, setting up the amount you want to spend on paid search advertising is a process, not just a question of how much money you have to spend. You need to figure out what your goals are and on a more granular level determine what keywords and intent level you’re going to target with your advertising. You’ll need to estimate search volume and start spending money to find out what your optimal ad spend level is.