What is the right overall level of investment in paid search and how do you set the right bidding or price levels for when ads are clicked?

This briefing is taken from Econsultancy's Paid Search Planning and Strategy Best Practice Guide, from a larger section on budgeting for paid search, which also tackles positioning strategy, bidding strategy, and bid adjustments.

Budgeting strategy overview

Setting the right level of budget for paid search and the optimal split for different products and services within the company’s account. Ultimately, this is the amount to be spent on PPC campaigns in relation to other marketing efforts and the marketing budget as a whole.

The ability to budget appropriately requires that goals and KPIs are set appropriately and that a reliable tracking system is set up to accurately monitor campaign performance. If a financial value cannot be placed on the clicks generated from paid search then any budgeting will only be based on gut feeling, which is never a solid starting point. Again, see Econsultancy's extensive Paid Search Planning and Strategy Best Practice Guide for more on setting KPIs.