How Much Should You Spend in Google Ads?

What should your Google Ads budget be?

As is the case with many things in marketing, the answer is “it depends!”

The cost per click for each keyword can vary wildly depending on the competitiveness of the industry, how many other advertisers are targeting that keyword, the geographic location you choose to advertise in, etc.

Another thing to keep in mind is that campaigns generally need at least 10 clicks per day in order to get enough data to reasonably make data-driven decisions.

For example, if your average cost per click (CPC) is $5 for a given search campaign, then you should be spending a bare minimum of $50 per day on that campaign.

Other factors that should be considered are the length of time for your sales cycle, and your website’s conversion rate.

To start your keyword research, go to Google Ads and click on “Tools and settings” and then “Keyword Planner.”

Type some keywords into the planner and adjust the location to make sure the keyword data is specific to the location you plan on advertising in. Then, Google will return keywords similar to the ones you typed in and provide you with some data for each keyword.

The “Top of page bid (low range)” and “Top of page bid (high range)” metrics for each keyword will give you an idea of the cost for each click on that keyword.

The article Kelly references in the video can be found by clicking here.

If you would like to get a comprehensive list of other simple but necessary Google Ads optimizations, sign up to receive our Ultimate Google Ads Checklist.

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Video Transcription

0:05
Hey everyone this is Kelly I’m one of
0:08
the analysts here at Main Street
0:10
ROI uh we love helping businesses with
0:12
their digital marketing and one of the
0:15
ways that we do that is through our Main
0:17
Street marketing tip videos uh today’s
0:21
video is about how much money you need
0:24
to spend in Google ads um now this is a
0:29
question that we often get from uh
0:31
prospective clients and new advertisers
0:35
it’s one of those things that people are
0:38
not quite sure uh not quite sure about
0:42
they they want to wrap their head around
0:43
that and figure out how much they need
0:45
to invest to get a a good result and to
0:49
see some uh conversions rolling in and
0:51
get either foot traffic to their store
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or get people to their website um and
0:56
then sometimes even get people on the
0:58
phone so uh it’s a really good question
1:01
to ask um and there are a few different
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ways you can go about getting that that
1:06
perfect monthly budget and uh go with
1:09
you know a solid number to uh to test on
1:13
your initial campaign that you that you
1:15
launch in Google ads um so I have a a
1:18
really helpful blog article pulled up
1:20
here from our website um this is just
1:22
another good resource that you can look
1:24
at uh after the video if you’d like but
1:27
one of those those questions is how how
1:30
much is the cost per click going to be
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um now this this can really vary
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depending on the industry and I’ve seen
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some of our clients have really really
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affordable um cost per click like in the
1:47
the the range of 50 cents or less um and
1:50
then we also have clients uh for example
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there may be a lawyer or um you know a
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financial advisor or some some industry
2:00
along those lines where they’re highly
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competitive um and some of them are in
2:06
saturated markets where there’s a lot of
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competition now those those costs per
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click can go anywhere from $40 up to
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over $100 and that’s per click so you
2:19
you know it’s not a one thing fits all
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type of scenario at all uh you know the
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Google ads budget can vary greatly
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depending on what your what Your
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marketing goals are um what your
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industry is um how much competition
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there is and it it could also have to do
2:39
with where you are located um for
2:43
example if you’re out in a very rural
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area and there’s just not very many
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businesses around you then you might
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actually get uh more affordable click
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costs on Google than someone who’s for
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instance in in uh San Francisco or
3:01
Atlanta or New York City um so you’re
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going to see those average cost per
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click go uh average cost per click go up
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with the increased competition as well
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uh so you know the time frame that that
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you want to spend on Google ads um as
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far as as far as the total number of
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clicks you need to get to even get some
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good insights that are statistically
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significant um we we don’t like to make
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decisions on the fly with very little
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data uh it’s just not a good way to go
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about optimizing campaigns or or making
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decisions too quickly uh it does take a
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little bit of time for Google’s
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algorithm to adjust and to know exactly
3:45
what type of lead they need to send to
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you whether it’s via phone or to the
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website or to your app so uh we we we
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strongly suggest that you can get at
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least 10 clicks a day minimum so you
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know often times we’ll do some quick
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math and and suggest to our clients you
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know anywhere between $1,000 to $55,000
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on their monthly uh total total budget
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to pay directly toward to uh I’m sorry
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to pay directly to Google ads um and
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that’s so that we can get enough data
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coming in that there uh that there are
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statistically significant
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um numbers that we can even look at so
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uh you know the the other thing is the
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time frame for how long we want to run
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that campaign and we always suggest to
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at least give it 3 to four months uh
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bare minimum we’ve got to give Google
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time like I said to adjust to any kind
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of adjustments that you’ve made we want
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to have enough data rolling in before we
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even make adjustments that way um
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anything that we do is is done with that
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dat data in mind so uh for example if
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you start to um add negative keywords
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from the Search terms report you’ll
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start getting more high quality uh
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clicks coming into your campaigns once
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those negative keywords have been added
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and you start building those up and then
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we also see big changes with any kind of
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bid adjustments that might be made in
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the account whether it’s based on
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demographics uh you know devices if you
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have a much higher conversion rate on
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cell phones or a much higher conversion
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rate on on desktop computers all of
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those things come into play when we make
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bid adjustments and you want to give
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that uh campaign enough time to have
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enough data to make that kind of
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decision on whether you want to um
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reduce or increase your bids for certain
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things um now another thing to keep in
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mind is your sales process so I don’t I
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don’t want to necessarily stay on this
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screen the whole time but if you um if
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you’re a business
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that
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is um a long sale cycle for instance if
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you have a a a very um I don’t know if
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if expensive is the right word but if
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you have like a large uh item that
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someone is going to take a significant
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amount of time to research um for
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example uh let me just think one of our
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clients um they they have therapeutic
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pools and they’re like exercise pools
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and they are quite the investment if
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you’re going to be installing it
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especially in a in a professional
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environment if you’re going to be um you
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know shopping around for let’s just say
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uh one of those like a set of those to
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be installed in a university somewhere
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uh whoever is going to be managing that
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project is going to be doing their
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research they’re going to be contacting
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multiple people so that sales cycle
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might go on and on for several months as
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opposed to like an e-commerce type setup
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where you’re selling um products that
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are $300 or less and it doesn’t take a
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significant amount of time for that
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person to do the research they’re going
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to probably convert within a matter of 1
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to three days and they’ll either buy it
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from you or they’ll go to a competitor
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so you’ll have to kind of consider your
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sales
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cycle um for example you know a mortgage
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broker is is an example here in this
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article then you could be searched for
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9900 times in a month anywhere you know
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around the US so if 1% of those
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Searchers clicked on your ad then you
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can get um you know 99 clicks from that
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specific keyword so is it realistic that
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all of those clicks will turn into uh
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engaged website visitors that are going
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to convert into a sale that’s that’s not
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likely so you have to have a longer time
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frame and spread out your monthly but uh
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spread out your monthly budget across
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several months
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um now the conversion rate is another
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thing that I had mentioned to
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you as far as having you know 99 clicks
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on your ad having those those 99
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visitors actually convert is not likely
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that that is almost an impossibility but
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um if you if you
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say one out of five for instance are
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going to convert then you know you can
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say okay well I have a conversion rate
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of 20
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% which would be great so um if you only
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have a few days in your sales cycle and
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20% of your leads are are likely to
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convert then you would basically figure
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out um you know how many how many leads
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you could get with your total monthly
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budget based on the likelihood of those
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clicks converting so if you say like 20%
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of those clicks are going to convert um
8:56
so your keyword is going to cost you
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know
9:00
however much depending on what you find
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out you can go to the keyword re
9:04
research Planner tool here in Google
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there’s a lot of tools available to you
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um you can you know type in any kind of
9:11
relevant keywords that you think people
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may use to to find your business or
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discover your business online uh you can
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get search volume and forecasts and then
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you can also get an idea on the average
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cost per click so for instance just
9:26
let’s just say um in
9:30
ground swimming
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pool near oh installer let’s just say
9:38
ingr swimming pool installer or
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swimming swimming
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pool contractor let’s just do that for
9:51
example um and
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then Google will show
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you different keyword ideas let me move
9:59
this up here so Google will show you
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different keyword ideas um inground
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swimming pool installer swimming pool
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contractor those are the two that I gave
10:08
Google so 12,000 average monthly
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searches across the US um pool
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installation near me is another option
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and you can actually tell that there are
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other keywords here that have a higher
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search volume than the ones that I
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thought of so that’s another reason to
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go into your keyword research Planner
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tool um you can see the the top of the
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page bid here is
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$212 this is the low range probably if
10:37
you’re less likely to see some
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competition in your area you’ll see the
10:40
low range top of the page bid now if
10:42
you’re in a highly competitive market
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for instance if you know if you’re in
10:47
Florida a lot of people need a pool down
10:49
here so you’re going to see a lot of
10:51
those contractors um more than likely
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you’re going to be paying the high range
10:55
top of page bid for markets where
10:58
swimming pools are extremely popular in
11:00
warmer climates
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so um this is a tool that you can use to
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get an idea of your average cost per
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click and then uh once you have you know
11:11
a good idea of that then your test
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budget let’s just say if you can get one
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new client from 100 clicks on a targeted
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keyword and if your keyword is going to
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cost roughly
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$13.76 per click then that would be
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about
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$1,376 to generate one sale and that’s
11:32
in ad spend so if you put this into your
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budget then if you
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only if you only have $100 a month to
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test which we would never suggest you do
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that uh but if you only have that um
11:49
dollar amount then it’s going to take
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you about a year of testing now if if
11:54
you could do at least $2,000 a month for
11:57
your monthly budget then that would give
11:59
us a a better idea um of how quickly we
12:03
can optimize because you’re going to at
12:05
least need to spend this much just to
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get one sale now this is just all
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theoretical um but these are you know a
12:15
pretty good guideline into how you can
12:17
determine what your test budget ought to
12:19
be in Google ads um so if you know what
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your typical conversion rates are then
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that would be a good place to start with
12:27
your calculations
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um do customers buy buy a product or
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service of yours in the same day do they
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have to come back and is it like a
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personal sales process where there’s a
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lot of follow-up involved so all of
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those things come into
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play um and you know you have to
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consider all of that when you’re doing
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uh your calculation but uh just as an
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overall suggestion we we generally do
12:54
like to start with about $1,500 a month
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at least in Google ads uh for your
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monthly budget um we can work with
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clients with lower budgets as well we we
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definitely have a a handful of clients
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um across all ranges of budgets so no no
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worries there we’ll we’ll definitely
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work with what you have um in most cases
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so uh we really do enjoy helping these
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small businesses
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and and sometimes we also will will
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actually help agencies with their
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clients as well so uh I do hope you
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found this video helpful um if if you
13:32
did then feel free to share this video
13:35
as well and um we also have a Google ads
13:40
checklist that you can download that can
13:43
help you out it’s completely free uh
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check that out in the description below
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thank you for watching until next time!