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Paid advertising (or ‘pay-per-click,’ PPC) begins and ends with strategic budgeting. Without a well-calculated and properly structured budget in place, you risk spending too much for underperformance, or too little for a high-potential campaign. Budgeting for PPC requires discipline, sure, but in today's volatile economy and AI-saturated era, PPC ad spend also requires a dose of pragmatism (tempered by a bit of a paradigm shift).
The way you determine your investment depends on your goals (e.g., pursuing awareness vs. conversions), industry competitiveness, location, and target keywords.
Here's where things can get messy.
Google has traditionally been the first destination for paid search ads. Still, by expanding its paid ad placements across every format, app, and device, it might have just maxed out users' focus on ads rather than organic listings.
Here at GoEpps, this new reality has pushed us to move media budgets to other tactical platforms, such as LinkedIn and Meta. It's also brought about intense scrutiny, management, and optimization of each campaign, implementing just the right investment to land in the proverbial Goldilocks Zone.
Not Your Dad's Paid Ads – How PPC Spend Is Evolving
The core math behind paid ads hasn't changed, but the way budgets are planned has. If you're still running PPC ads the way you did a few years ago, you may be experiencing diminishing returns. Rising costs, increased keyword competition, and ad management automation mean dispensing with a "set it and forget it" approach and adopting something more strategic and efficient.
Traditionally, PPC budgets were calculated around volume (how many clicks or impressions you could afford based on an estimated cost per click (CPC)). But with today's CPC rates soaring, particularly on Google, where you're not just competing for clicks, you're competing against Google's ad market, sectors are experiencing a 30% to 100% increase in CPC. The rise of AI-generated search results has increased "zero-click" searches, pushing ads further down the page. Competition for top keywords is growing as more brands shift budgets from other channels to search. Automated bidding (e.g., Performance Max) is resulting in higher bids as the system chases conversions, leading to less predictable CPCs.
The New Normal of PPC: What Now?
Prioritizing profitability metrics, such as target ROAS (Return on Ad Spend) or an allowable CPA (Cost Per Acquisition), is our weapon of choice on Google and Meta. Traditional formulas are used to estimate feasibility, while working backward from revenue and margin targets—factoring in conversion efficiency, total advertising cost of sales (TACOS), and maximum customer acquisition costs to ensure campaigns are sustainable—is the new black (and how to stay in it).
Here's a pro tip: one way we circumvent demand erosion from rising CPCs is by improving your conversion rate faster than CPC growth. We ensure landing pages are optimized in every conceivable way, so when your conversion rate rises, say, from 5% to 6%, it can often offset a rise in CPC.
A Business Owner's Guide to the Changing Economics of Paid Ads
One of the biggest misconceptions in digital marketing is that PPC can be "tested" effectively with very small budgets. The reality is that modern paid advertising platforms rely heavily on data volume to optimize performance. So while it's possible to launch a campaign with a small budget (or if you're targeting a low-competition niche audience, you can get meaningful results), effectively testing and optimizing for performance on modern platforms like Google Ads and Meta (both of which use machine learning) requires significant data volume. Misunderstanding these scenarios can quickly burn through budgets.
Now that automation plays a central role in modern PPC, smart and informed strategizing is key. For SMBs, automation works best when campaigns are built on clear goals, clean data, and sufficient data volume. This is why we constantly monitor and update our clients' PPC campaigns around what can be measured reliably—not on what's worked in the past. We segment research vs. ready-to-buy campaigns and adjust messaging and landing pages to align with intent.
We also diversify (it's not just for investment portfolios anymore).
Most people associate PPC with Google, but we will always evaluate search, social, and video when allocating budgets, given that PPC competition remains intense (and is unlikely to change in the near future). When campaigns are coordinated across different platforms, the pipeline is more efficient. A person who became aware of your brand on one platform might search for it on Google and convert through retargeting on Facebook. This omnichannel approach pushes users toward conversion, improving ROI.
What Determines the Cost of a PPC Campaign?
While PPC ad spend varies from company to company and industry to industry, today, it is largely determined by several factors:
Keyword competition and search intent.
Market geography and audience density.
Your Quality Score.
Landing page quality and conversion rate optimization.
Tracking accuracy and attribution clarity.
Time allocated for learning and iteration (active management).
Industry research shows that paid search is still expected to command close to 40% of digital advertising budgets and will remain one of the most significant channels for capturing high-intent, bottom-of-funnel demand. Google Ads, for example, reaches over 90% of global internet users. With millions of people conducting Google searches every day, we say this math checks out. It's also a key reason why you should invest in PPC.
Finding the Goldilocks Zone
While PPC seems less forgiving, it hasn't become less effective. Rising costs, AI and automation, intense competition—it's not for the faint of heart. But it's no match for our expert digital ad teams whose math-y proclivities, technical expertise, and personalized messaging acumen deliver consistent (and impressive) results.
We start with focused, goal-oriented ad campaigns uniquely tailored to each individual client. We pair PPC with strong SEO and content to optimize touchpoints and conversions. And we scale in phases to ensure sustainability and performance.
This is part of how we place PPC investment through the uprights, top shelf, and for nothin' but net. Otherwise known as the Goldilocks Zone: high enough to secure desirable ad placements and volume, but not so high that you overspend or so low you lose visibility.
We set bids that are competitive enough for top-of-page results within your CPA target. We target keywords with sufficient search volume that aren't too broad, and we Geotarget within a strategic radius, allocating enough funds to test and learn.
A maximized Quality Score reduces your CPC. A/B testing helps us adjust our strategy based on the best cost-per-result, not the lowest. And we ensure your Click-Through Rate (CTR) is high enough to show engagement, but not so high that it indicates irrelevant traffic. We also regularly monitor competitor tactics to ensure we stay in the sweet spot.
Spend Smarter on Paid Ads
If you're looking for up-to-the-minute insight into how to invest in PPC effectively, no overspending, no gambling on guesswork, GoEpps can help. Our team builds sophisticated, data-driven paid ad strategies designed for today's platforms and today's business owners. Book your free strategy call today.
