Google Ads Budget: An Overview
Before you jump into spending dollars on Google Ads, first, you should understand the basics of this marketing platform, and what exactly youre paying for.
Figure out as much of the marketing as possible before buying in with Google Ads. Understand your customers. Offer value. Think through your segmentation, targeting, and positioning and see how items link up to different keyword targets youve identified. Be ready to pivot quickly if things dont work, but also do give it time and room to breathe. Know how long it should take to see leads or sales come in so that youre not prematurely abandoning an approach that could work given more runway.
Nathan Pabich | Director of Paid Media at Digital Third Coast
Imagine the Google Ads platform as a big market where you can buy traffic to your website. So, you come there with a specific monthly budget youre willing to part with. To get that traffic, you have to bid on keywords relevant to your industry, product, or service.
Just like in any other market, the competition is big. And if you dont have an unlimited sum of money to spend on Google Ads, you have to think carefully about the keywords you bid on to get the best results without blowing your budget.
How To Calculate The Initial Google Ads Budget
To get a clear picture of how much money you need to invest in Google Ads and how much traffic you will get, you should always have realistic expectations.
To determine an initial Google Ads budget, you must first clearly define your goals. With set goals, you will be able to reverse engineer what budget you should start with. For example, say your goal is to gain 100 new customers. If you have a 4% conversion rate and the average cost-per-click in your industry is $2, you will need to spend $50 to gain one customer and $5,000 to earn those 100 new customers. The best tip I can give someone who is just starting to run Google Ads campaigns is to set clear goals and agree on those goals with all stakeholders. Whether you are on an internal marketing team or working for an agency, if your goals arent clear, the stakeholders will never be satisfied. As Zig Zigler famously said, if you aim at nothing, you will hit it every time.
Drew Mandish | Director of Digital Marketing at ROI Amplified
Lets imagine you already have your budget and want to know how many clicks youre going to receive within that budget. Heres the formula you can use to calculate your approximate traffic:
Number of Clicks = Budget/Average CPC
Now, lets assume you dont know how much you should spend on Google Ads, but you have an idea of how much traffic youd want to get. Heres how you can determine your approximate budget:
Budget = Desired Clicks x Average CPC
What Factors Affect The Cost Of Google Ads
Google Ads is a bidding platform, so the ad price is based on the demand for the keywords you want to show up for.
I start from the bottom and work my way up. Increasing your bid can get expensive quickly, so I do a lot of keyword research for the least expensive bids and increase my bids with those keywords the most. Once my campaigns with those cheaper keywords have found success, I work my way to more expensive keywords now that I have a fighting chance.
Jennifer Merrigan | Digital Marketing Specialist at VirtualPBX
Heres what influences the price of keywords you bid on when running ads on Google: