Google Ads is an excellent marketing tool for businesses to improve online exposure.
But Google Ads does have a cost to it. A common question I get from clients is, "how much do I have to spend to see results?"
We all know that marketing has a risk; you spend time and money on the campaigns to get your business out there with the hope that your customers see it and choose you.
There is a term used for Google Ads: "Pay Per Click" or "PPC." This describes the bidding strategy. There is a cost per click your ad gets a click.
With that in mind, you don't want to get a bunch of clicks, but try to get quality clicks to make the most of your budget.
Google Ads is set up to budget with a daily ad spend budget. This allows you to control your total costs. You will be able to choose how much you spend each day.
To determine how much you should spend each day, you need to use the Keyword Planner to determine the estimated cost per click for your target keywords and geographic area. I wrote a post about how to use the Google Ads keyword planner here.
Once you see how much it costs to get a click for your top keywords, you can create the budget formula.
DAILY BUDGET =
Average Cost Per Click ( x ) Total Daily Clicks You Want
Trying to find the best budget will take time. After 14-30 days of an active campaign, you should use your conversion rate and goal as your basis to increase the budget to reach the total goals you have set.
Here is an example,
My business needs 3 calls daily because 1 of the 3 calls normally becomes a customer. My conversion rate is 33%.
(This is an example to explain how to determine the budget, a normal conversion rate you should aim for is 10%, and grow from there.)
My average cost per click for my top keywords is $15.00 to be at the top of the page and get the calls I want.
My budget is a minimum of $45 per day to get the results I need for my business.
Here is the formula
$45 / day = $15 cpc (x) 3 clicks (or calls)
To determine the monthly budget for this example would be as shown below,
$45 / day ( x ) 30 days in a month = $1,350 / month
I am upfront with each business I speak with about using Google Ads for their business. Sometimes Google Ads are just not successful for certain businesses.
When working with KaeRae Marketing for Google Ads Management Services, we have a minimum budget requirement of $6000 per month.
On a side note, we have a transparent ad spend policy that you can read more about here.