Once you become familiar with the benefits of paid search marketing, it won’t be long before you are setting a budget and getting started.

Here is the question you need to answer: are you spending your money wisely or foolishly? Just the same as any marketing strategy, you must track your spending and results.

There is more to setting a PPC budget than randomly selecting a number and hoping you achieve the desired results. You have to know what types of leads you are trying to generate. To figure this out, focus on:

• Buying cycle
• Location
• Visitor frequency
• Target cost per lead

Once you have a clear understanding of the characteristics of your target lead, it is time to answer these questions:

• What is the best way to value a lead?
• How many leads are you attempting to generate through PPC?
• What is your site’s conversion rate?

In addition to the above, there is one question that is even more important:

What can you afford to spend?

You need to know your budget, down to every last dollar, and then stick with it regardless of what comes up. If you get into the habit of overspending, it won’t be long before you sour on this traffic strategy.

The best way to spend wisely is to know the finer details of your situation and strategy, such as the type of lead you are targeting and your budget. Start small, track each and every move you make, and focus on tweaking your approach to maximize your budget and increase your conversion rate.

Once you are running a “positive campaign,” you will have the foundation necessary to ramp things up to take full advantage of the power of PPC.