How Much Should You Spend On Google Ads?

There’s one question I get asked in 99% of the conversations I have with business owners discussing Paid search and my services as a ppc consultant: How much should I spend on Google Ads?

So, it’s time to answer it on the PPC blog.

Spoiler. If you’re here looking for a figure, there isn’t one. Sorry.

There are so many factors and influences on PPC budgeting and cost, the question becomes impossible to answer with a generic figure. These factors include…

– Industry
– Annual Marketing Budgets
– Products & Services
– Keywords
– Keyword Match Types
– Keyword Search Volumes
– Keyword CPCs, Quality Score & Ad Rank
– CTR%
– Competition
– Location Targeting
– Network
– Device
– Ad Scheduling

Whilst I can’t give you a number, I can give you steps to take and things to think about before budgeting for a PPC account.

1. Marketing Budgets

Are you working under a business owner or marketing manager who has set a budget for Paid advertising, attributed from a total annual marketing budget?

If so, you’re going to be restricted. Your decisions and strategy will have to fall in line with budget and compromises will be made.

It’s worth keeping the budget conversation open, regularly explaining the benefits of a more fluid and flexible approach. Recommendations will be received better if you’re delivering results and positive ROI, so keep on top of that account optimisation.

2. Strategy

Strategy incorporates many of the influences in the above list. Before diving deeper into the budgeting process, you need answers to questions like…

What products or services do you want to advertise?
What is your demographic?
Do you want to target this demographic worldwide, UK or locally?
Are there specific days and times you want to advertise, or 24/7?
Do you want to focus on Google search, or supplement with display/remarketing?
What is the state of mobile search in your market industry?

Having all these questions answered early is not only key to budgeting, but moving forward will benefit account build, management and optimisation.

3. Keyword Research

Now on to keyword research, arguably the most important part of the budgeting process.

The majority of Google Ads accounts will be heavily focused around traditional search, so keywords dominate the account spend.

There are a handful of tools to help you carry out keyword research, some free and some paid, but I always come back to Google’s Keyword Planner.

How to carry out keyword research is whole other article in itself, one which I will cover at some point, but to very simply summarise the process…

1. Input your website’s domain into the “Find keywords” area of Google’s Keyword Planner to get a basic list of keywords.
2. Use a few of these keywords, plus some of your own keyword ideas to look for more variations.
3. This will kick out almost 1,000 keywords that’ll need sorting through, removing the irrelevant ones.
4. Once you have a list of keywords you’re happy with, jump into the “Get search volume and forecasts” area.
5. Duplicate your list so you have broad match and exact match versions.
6. Input this list with the relevant location, language and network settings.
7. Set a max. CPC which will get you an average position of 2-3.
8. Click, impression, cost, CTR, CPC, position and more should be nicely aggregated for you top and centre, with individual keyword stats listed beneath.

Now you have that spend figure you’ve been looking for.

4. Goals & Conversion History

OK, so you’re armed with your keyword research, search volumes and costings.

With knowledge of your business, you should be aware of the lead to customer journey – at what rate your website converts visits to leads, and how many leads go on to become paying customers.

Combining all of the information into a simple formula, you’ll be able to estimate how many leads and customers you’re likely to generate based off a selected budget.

Example…

Average CPC: £1.50
Clicks/Visits: 1,000
Budget: £1,500
Website Lead Conversion Rate: 8%
Total Leads: 80 (8% * 1,000 Clicks)
Lead-To-Customer Conversion Rate: 70%
Total New Customers: 56

Add this formula into excel and you have an on-demand tool to calculate ROI. Just shift the figures around based on your businesses numbers.

A great way to utilise this is backwards, too. Start with your total new customer goal, and you can work back to an estimated budget that’ll deliver that number.

This isn’t an exact science, and actual figures are likely to vary once you’re live, but I’ve found it very productive for planning and strategising. The point is to help you understand what you’re likely going to need to spend to hit your goals. You can throw whatever spend you want at Google Ads, but in doing so now, you’re not walking into it blind with no sense of expected ROI.

5. Start Small & Scale

If you’ve completed the previous steps, but still unsure of a start budget, my final piece of advice would be to start small and scale.

The truth is, it’s going to take time to get your Google Ads account performing optimally. 3 months is the time scale I give myself and my clients.

In this time you’re going to be making mistakes, figuring out what works and what doesn’t, A/B testing, building a negative library and lots more. Even as a ppc consultant, I go through these processes. It’s important not to blow budgets out of the water during this time. Figure it out, scale when you achieve target ROI and have confidence in maintaining that as the account grows.

The “Google Ads doesn’t work, it’s too expensive” people. Yeah, don’t be one of those. Follow the steps. Learn – strategise – build – test – optimise – grow.

Before you go, if you learned something new of you’re leaving with some value from this article, please take a moment to share it across social media, contact me, or drop me a message on any of the social platforms below…

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