Setting A Google Ads Budget For Your Business

If you’re a small business owner prioritizing your marketing efforts, you may have considered starting a Google Ads campaign. While there are a lot of technical aspects of setting up and managing a Google Ads campaign, one important consideration is your budget. You want to ensure that your money is being used wisely. 

Start With A Small Ads Budget

Google recommends that small businesses start with an average budget of $10 to $50 USD a day when they first start ads. This means, at minimum your campaign should have a monthly budget of $304USD. It is very important to decide what you are comfortable with spending before you start your campaigns. Remember that as your ads start to serve, you should be able to increase your budget in conjunction with the increase in sales/leads.

Utilize A Keyword Research Tool

Google’s Keyword Planner can be used to view the average monthly search volume of your target keywords, as well as the corresponding competitiveness of each. It provides an average estimated bid, so you can see what others in your target area are paying for their search ads to appear on the top of the page. Consider using the Keyword Planner to discover new, relevant keywords and phrases, and stretch your marketing dollars by incorporating some less competitive keywords into your ads. Programs like SEMRush and Ahrefs also allow you to discover keyword opportunities.

Analyze Your Competitor Ads

It’s important to consider the number of ads you are competing against in the search engine results pages (SERPS). Competitive industries, for example Garage Door Companies and SaaS, are going to have many ads vying for the same position. This means that it will cost more to have your ads shown, and you may need to consider a larger budget to stay competitive. If you’re running ads for your local area, a great place to start is to locate ads in your own search results, using keywords you want to target. Some searches can feature as many as four Google ads on the top of a results page, while others may not generate any. The location from which you are searching is also going to heavily influence the number of ads, as smaller towns and cities tend to have less ad competition than those in larger urban centres. Those who target larger cities need to be prepared to pay more.

Consider Your Main KPIs (Key Performance Indicators)

What is your end goal for running an ad campaign? Are you looking for phone calls? Website traffic? Lead form submissions? Product purchases? Your budget is impacted by what you consider a “successful” ad campaign. CPA (cost per action) is one of a few common targets used to help determine budgets. Simplified, this goal takes into consideration your desired results and your expenses, to determine an ideal daily spend. If you want to get 10 conversions per day in order to be profitable, and you’re prepared to pay $20/conversion (calculated based on how much profit you’d make after other costs), then the calculation would be: 20*10=200, making your daily budget $200.

After taking all of our suggestions into consideration, you’re ready to start determining the best budget for your Google Ads. Regular management of the ads is essential to ensure you don’t go over budget and that they are performing well. If you’d like assistance managing Google Ads, we offer Google Ad management services.