Know your figures before you start

This is why you need to be confident in your figures.  You need to know how many visitors to your site you need to get from your Google ads to generate a sale.  Then, you need to know the average value of that sale and how much on average every new customer will spend with you in the future. Only then can you judge if the cost justifies the campaign. 

For example, if after testing on a lower budget you have proved that your Google ads are costing you £1.60 a click and (on average) out of every 20 people who came to your site this way one of them became a new customer, then you know you are paying £32 per customer (because 20 clicks x £1.60 per click = £32).  If you are a vegan accountant, and you know that on average a customer spends £500 a year with you and remains a customer for 3 years, then you’ve spent £32 to get £1,500.  So in this case, you should put up your budget to get as many new customers as you can at that cost.

However, if you are selling vegan sweets (as I’ve used in a lot of the examples), and you know that the most a customer spends on your website over a year is £50 and it’s costing you £32 to get that customer, then stop.  That’s a bad deal.  It doesn’t mean PPC is wrong for you, it means you need to keep testing and tweaking until the figures make sense.  You need to work out how to get your cost per click down (and there are lots of ways to do this) or get the conversions on your site up – so that instead of 1 in 20 becoming customers, 1 in 5 do.

Also be aware of ‘double-dipping’ into your profits.  If you are running an online advertising campaign to your own website then you are only paying once to get that sale.  If instead you are running a campaign on Google to send people to your Amazon listing or your Etsy shop, then you are paying Google for the traffic and then also paying Amazon or Etsy their cut of your sale.  Don’t get into the situation where you’re the one getting the smallest cut of the pie.