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Budgeting
Even though there are few barriers to using search engine marketing, budgeting can be a little tricky. Understanding how search engines bill for ad placement will help you get the most out of your budget. In addition to a fluid formula based on keywords and pay-per-click, there are other costs to consider.Keywords
Search engines bill based in part on the keywords you wish to bid on. As part of setting up your campaign, we will help you determine the keywords or phrases that you judge will corres-pond to your prospects' search terms. When a search engine's user types keywords that match your selections, the search engine "serves" your advertisement, causing your ad to appear on the results page.Based on your keyword selection, the search engine presents you with the going rate for each keyword or phrase. You then have the opportunity to name the price you are willing to pay for it. The actual cost of the keyword is determined by dynamic auction and could be different each time your ad is served. This auction is automated, computing the going price for a keyword using a complex algorithm that dynamically tracks bids.
Where your listing ranks on the results page will depend on the amount you wind up paying for your keywords.
Since your competitors are also bidding on these keywords and phrases—and because that bidding affects the current cost—it's never a case of the winner takes all. The high bid is only valid until someone bids higher.
Pay-per-click
Once you've settled on your keywords—and their costs—you wait to see who clicks on your ads. It is only when a prospect actually clicks through that you are charged for your ad. The amount you will be charged for each click-through is determined by the cost of the keyword when your ad was served, as well as the amount your competitors are willing to pay.Search engines let you control your own budget by stating a maximum amount you are willing to spend per word per day. In other words, determining what you're willing to pay for a given word limits how many times the search engine will use that keyword to serve your ad on any particular day.
Keep in mind that there are many factors at work. If you bid low on a keyword, for example, your ad could be ranked near the bottom of the sponsored links. Or, it might not appear at all. You can avoid popular words to reduce your costs, but then your visitors won't be as targeted. If you set too low a limit on the maximum amount you wish to spend daily, then your ad might not appear at key times of the day. See Keywords in Qualifying Your Leads.
Other Costs
There are several other costs that you should keep in mind. For example, there is the cost of designing, developing, hosting and maintaining a landing page. After all, once you entice a prospect to click through, you want him or her to land on a page that increases the chances that you will suceed. See Landing Pages in Converting Prospects.In addition to developing the landing page, you'll want to monitor visitors once they arrive so that you can measure response. In other words, you'll want to invest in a mechanism that can gauge the effectiveness of your landing page.
Finally, there is the consulting fee for helping plan and execute your campaign. Companies like Cornerstone usually base their fee on the complexity of the campaign, as well as on any other services (such as web development, hosting or monitoring) they are providing.
A full-service company like Cornerstone can help you set a budget based on a combination of these factors.
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