What is a budget in Google Ads?

It is the amount of money you are willing to spend every day on an ad campaign for a month. If you decide to spend $300 per month on a campaign, it would mean you are spending $9.80 daily on your campaigns.

How to set the perfect budget?

To decide on how much to spend you will need to look at the kind of business you are into, your goals, and your audience. The following should guide you in estimating a budget that suits your business.

  • Using Google’s Keyword Planner: You will begin running your campaigns by deciding which keywords you want to choose and the amount you are willing to pay for each click to your site. Though you might have an idea on what keywords you want, it would be good to research the keywords using Google’s Keyword Planner. Not only would you get a list of the keywords you are looking for, but similar keywords and how many people search for those each month, with a suggested Google ads bid based on how much advertisers are competing to pay.
  • Testing campaigns: Running a campaign for the first time might not yield profits, since you are not aware of what would work. It would be good to run a test campaign with a limited budget and a small number of select keywords, at least ten. Next, you will have to determine how much to pay for each click. It would be good to follow google’s suggestions for bids, at the same time keep in mind how much you expect to earn from each keyword. If you are going to only break even, leave that keyword out. Monitor those ads closely, if they are not converting you might want to pause them before you end up exhausting your budget.
  • Optimizing campaigns: Learnings from the test campaigns will lead you to create effective campaigns in the future. Look out for CTR, Cost per conversion, and negative keywords. 

CTR, click-through rate is calculated by dividing the number of clicks each ad received by the total number of impressions it received. An ad with a low CTR will cost less.

Cost per conversion is the percentage of people who converted after clicking the ad. Keep an eye on the average cost per conversion, it should be lower than the sales it is generating. 

Negative keywords: Based on the learnings of the test campaign, you will know the non-performing keywords. These could be your negative keywords that prevent them from showing up in search results and exhausting the budget.

  • Tweaking Bids & Bidding Strategy: It is wise to have a set marketing budget, and a daily tab ensures your spending are in control. You might want to revisit the budget if your campaigns are producing positive ROI,  allocating the highest to those channels where you see the most returns.

We would be happy to help run Google Ads campaigns or improve existing campaigns for you. We have an expert team that can help you decide on a budget for the best possible returns.