How to Choose the Correct 

Google Ads Budget 

Have you ever started a new Google Ads Account or a new campaign and felt lost as to what budget you should assign? If the scenario “I only have $500 to allocate for this, so that’s what I’ll go with” seems familiar, then you are not alone.

Starting off with the correct Google Ads budget is important. Your strategy can set your project up for success or failure and the correct budget will ensure you expose your business and strategies enough to maximize the potential of your business.

Here are three easy steps to follow to get the ball rolling in the right direction.

1.Choosing Keywords

  1. Keyword Planner

3 Calculating the Correct Budget

Choosing My Keywords

Depending on your strategy this may vary but always keep it simple, one worded keywords tend to be too broad. Instead, choose keywords that are 2 to 3 words in length. They tend to be the most common and are more effective.

Let’s assume that you are in the Lawn Care business and you are looking for good keywords to start off with, I recommend always to put yourself in your client’s shoes and ask “how would my client search for my business?”.

You know that they would probably look for lawn care, lawn treatment and lawn services. Good job! Now, let’s go on with the next one, think of other words that you can connect to your initial keywords to create longer, more specific terms that people also use to search.

I have always been a fan of using variation keywords like services, company and near me, to name a few. If you connect these with your two worded keywords you easily have created a small and effective keywords list that looks like the following:

  • Lawn care services,
  • lawn treatment company,
  • lawn services near me,

and if they make sense, you can scramble too:

  • lawn care near me,
  • lawn treatment services,
  • lawn care company.

Now, what do we do next? how can we use these keyword variations to find the correct budget for me?. The next step gets a lot more fun and it’s the use of the Keyword Planner.

Keyword Planner

First let’s make sure we know where to find the Keyword planner. Please follow these steps to get there:

  1. Click on tools

  1. Then in the drop down choose Keyword Planner:

  1. Choose the option to search by keywords since we already came up with ours:

  1. Type your keywords and Search

  1. Lastly, click on get started and make sure your target location is accurate:

You will notice that you will get a list with avg. CPCs (cost per clicks) for your keywords and under that a list of other keyword variations that might be useful for you to expand on your campaign and it looks like the following:

We learned three things from our research in the keyword planner:

  1. Lawn care services has a top of the page bid of $12.72
  2. Lawn care treatment company showed no data
  3. Lawn services near me has a top of the page bid of $10.95

Lawn care treatment showing with no data means you will very likely get little to no traffic but what is neat is that you now have other keyword variations below that do have traffic and one that stands out to me is lawn care companies with a top of the page bid of $10.12.

We can see from these three keywords that;

  • lawn care services has 140 avg. monthly searches,
  • lawn care companies has 20 Avg. monthly searches
  • and lawn care service near me has an avg. monthly searches of 140.

Now, lawn care companies is on the lower side compared to my other two keywords but if you believe it is an important keyword, use it in your campaign, there are still valuable searches that can happen there and it’s worth the shot.

Lastly, please keep in mind that I am focusing on top of the page bids, even though this is not always recommended. There is a lot of competition to endure if you want to remain the top search result and position does not guarantee that you will get results.

Instead, calculate a budget that is good enough for you to be seen, even if it’s not on first position.Your budget shouldn’t limit you from traffic opportunities and exposure. Keep in mind that you will still be shooting for those avg. ad positions that are best for you. If you are seeing results in other top ad positions like 2 and 3 go ahead and shoot for those because you probably know you can count on that type of budget.

So now you must be asking yourself where’s the good stuff? what is my budget? how do I calculate it? This is where all the fun finalizes. Our final step is my favorite which involves using basic math to identify how much budget to allocate to your Google Ads project.

Calculating the Correct Budget

We now know that the avg. cost per click for top of the page bid for my three keywords that I have chosen are the following:

  1. Lawn care services has a top of the page bid of $12.72
  2. Lawn care companies with a top of the page bid of $10.12
  3. Lawn services near me has a top of the page bid of $10.95

Please keep in mind that your math can vary because these are not going to be the only keywords you will be using. The more keywords you find that would be best for you, the more efficient your simple math to identify your budget would be. For the sake of this example, let’s calculate using our three keywords above. I recommend you always calculate with the number 10 and we’ll learn why in a moment.

Calculations:

10 clicks a day is the minimum that you should shoot for when running a Google Ads project. This gives you enough of a chance to expose your advertising to enough people that are interested in your service. 

Yes, every industry is different and every project is different but 10 on average can be a good guide to not only calculate your budget but also forecast how many leads you may potentially get. Meaning, if i get 10 clicks a day, how many of these will actually reach out to me? Maybe 30 percent (3 out of 10) and if my closing rate is 33% (1 out of 3) that means that I can end up closing one of these deals for every 10 clicks.

What would closing one deal a day mean to you at the end of the month after calculating the overhead cost and Google Ads Spend? How much of an ROI are you making? If you are able to answer that question and the numbers are positive then you should be good.

Please keep in mind that these are forecasts and since every project is different this may not entirely apply to you but it gives you a good idea of where you stand with your opportunities. Now the purpose of this is not to know my conversions rates and how many leads I can generate and close but this is so you can always have an idea of not only how to calculate your budget but how to train your mind to see what results are yielding from your Google Ads investment. Always ask yourself if this is the right investment for you.

Lastly, it is time to calculate and choose the correct Google Ads budget and it looks like the following:

The sum of my three keywords is $12.72 + $10.12 + $10.95 and this averages to $11.26.

$11.26 is my Avg. cost per click for my keywords.

If I apply the 10 click rule I need to multiply $11.26 x 10 and this equals to $112.6

Let’s just assume that you will be running your ad 24 days out of the month because you’re closed on Sundays. If we do the math and multiply for the total time it would be the 24 days x $112.6 which equals to $2702.4 but you can round down at an even $2700 for your monthly budget.

You may be thinking that $2,700 is a lot. However, keep in mind that this is the budget you need in order to set yourself up for success. You should also be telling yourself how many leads you need to close in the month to break even, remember baby steps and breaking even to start off is a win and it generates good momentum to move forward in the right direction.

If you don’t have the best experience of managing your Google Ads account then you should consider talking to a digital marketing agency for expert help on managing your campaigns and budget. 

Happy budget choosing and calculating! best of luck!

 

Enam Cruz
Partner Consultant

 I'm just one of those likeable dudes that everyone wants to be around. I like making people laugh and I believe that being genuinely nice and honest takes you a long way. I'm currently a Partner Consultant at Hite Digital and I'm extremely passionate in helping our partners and clients be successful and grow. I take pride in the responsibility of communicating the success of our projects and making sure we are moving forward in the best direction possible.

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