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How to Allocate Budget for Digital Marketing: A Practical Guide for Marketers

How to Allocate Budget for Digital Marketing: A Practical Guide for Marketers

When it comes to digital marketing, Pay-Per-Click (PPC) advertising is one of the most effective ways to reach your target audience quickly. 

But one of the biggest questions marketers face is: How much should I spend and where?

A smart digital marketing budget isn’t just about picking a number; it’s about making sure every dollar works toward your goals. In this article, I’ll walk you through the six essential steps to allocate your PPC budget like a pro.

1. Start with Clear Goals

Before you even open Google Ads or Facebook Ads Manager, ask yourself:

  • What do I want to achieve? (Brand awareness, website traffic, email sign-ups, sales, bookings)

  • Are you able to sustain a long-term term evergreen campaign?

  • Do you have a communication strategy adapted for every channel?

2. Know Your Audience & Channels

Depending on the industry you are part of, identify where your audience spends their time and where they’re most likely to convert.

  • Google Search: High-intent traffic but often higher CPC.

  • Display & YouTube Ads: Great for awareness but lower intent

  • Social Media: Facebook, Instagram, LinkedIn, or TikTok might offer cheaper clicks and better targeting for certain niches.

3. Research Costs & Competition

Use tools like Google Keyword Planner for Google:

  • Find the average cost-per-click (CPC) for your target keywords.

  • Check how competitive those keywords are.

  • Estimate the clicks and conversions you can realistically afford.

In Meta, you can use A/B testing to get valuable insights about your audience

  • You will have a clear picture of what combination of image, text, audience, or placement is better for your audience. This happens by showing each version of your ad to a segment from your audience, while ensuring nobody sees both.

  • You can use this testing tool when you’re trying to measure changes to your advertising or quickly compare two strategies.

4. Prioritize & Split Your Budget

Not all campaigns should get the same budget share. 

Here’s a simple rule of thumb:

  • 60-70% → Prospecting new audiences.

  • 10-20% → Testing new keywords, ads, or audiences.

  • 10-20% → Remarketing to people who already know you.

5. Set Realistic Daily Budgets & Bids

Use your research to decide:

  • Daily spend = CPC × clicks per day you want.

  • Monthly spend = Daily spend × days per month.

Example:
If your average CPC is $2, and you want 50 clicks per day:
$2 × 50 = $100 daily budget
$100 × 30 = $3,000 monthly budget

Start with manual bidding to learn what works, then test automated bidding once you have enough data.

6. Monitor & Optimize Continuously

PPC is never a “set it and forget it” game.

  • Check your campaigns at least weekly.

  • Look for top-performing ads, keywords, or audiences.

  • Reallocate budget to the best performers and pause or tweak the poor ones.

  • Use A/B testing to keep improving.

These tips are just a scratch of the surface steps you can follow on your own, but if you want to have these tasks managed by a pro team, do not hesitate to contact us.