Do you have any questions about how much to spend on Google Ads? Businesses around the world have the same question about Google Ads budgets.

Pay-per-click (PPC) ad spending average is between $9000 and $10,000 per month. Your company might be eligible for a higher Google Ads Budget if they follow these steps.

This article will show you how to set up a Google Ads budget that works for your business. If you’d like to talk with someone,

What’s a Google Ads Budget?

Google Ads Budget, also known by Google AdWords, is the amount that your company would like to spend on an ad campaign lasting 30.4 days or longer. This budget can be used to decide how much you would like to spend each day, but it will not exceed your overall budget.

How do you set campaign budgets in Google Ads?

This illustration will show you how campaign budgets work in Google Ads.

An ecommerce store wants to promote its latest shoe line, so it launches an advertising campaign. The daily budget is taken from the company’s monthly budget and set at $9.80.

How did they reach $9.80? First, they took the average number of days per month (which is 30.4). Next, they divided their monthly budget ($300) by the average amount of days per month (30.4).

Use this simple formula to determine your Google Ads Budget

How can you calculate the budget for Google Ads as an ecommerce store? Here’s how to do it:

Daily budget = Monthly budget / 30.4

Some companies however use this formula in reverse:

Monthly budget = Daily Budget + 30.4

You will need to find the average cost per keyword click to use the formula. You can do this using the Google Ads Keyword Planner. Then, you can calculate the optimal number of clicks.

How much should my company spend on Google Ads?

It is difficult to answer everyone when it comes to Google Ads budget. The Google Ads budget for your company will be based on its overall marketing budget and the average sales price.

A car dealer can expect to spend more than a clothing retailer if their average customer spends $20,000, but not if they spend $15. 

Clients have had success with budgets ranging from $500 to $30,000 each month. The average middle-sized business spends between $9000 and $10,000 per month.

There are four ways to set up a Google Ads budget.

You need to do some research before you can determine the amount you should spend on Google Ads. 

1. Use Google’s Keyword Planner

First, you must decide which keywords you want to target and how much money to advertise your campaign via Google Ads.

You may know what keywords you want, but you shouldn’t create campaigns around them. You can instead use Google’s Keyword Planner to search keywords and find more keywords.

Let’s say, for example, we wanted to launch a Google Ads Campaign to reach people who were interested in the cost of designing a website. We looked at the keyword “cost to build a website span>”

Enter that keyword in Keyword Planner to get the following results:

This allows us to see similar keywords and the frequency with which people search them each month. It also shows how many advertisers are competing on those keywords. A suggested Google Ads bidding is also available.

You can use this search to find the best keywords that will help you target your business.

2. Run test campaigns

Only a few experiments will tell you if your campaigns are successful or not.

These testing campaigns might not be profitable. Don’t hire a PPC campaign manager if you don’t have the budget.

However, you can consider any money lost in this process as an investment in your overall PPC strategy. It will be repaid when you publish optimized and tested PPC ads.

Ready to get started? These are the steps:

Choose your keywords

The keywords you choose for your PPC campaign must reflect your overall goal.

The information in Google’s Keyword Planner will influence this step. You can also see the suggested ad group Google offers.

Copy the URL of the page that you want to advertise and you’ll see several keyword groups. This tool can help you discover keywords you missed in your initial research.

It’s a good idea to test some keywords first if this is your first campaign. We recommend you test at most 10 keywords.

Decide your bids

Once you’ve chosen the keywords you want to target, you can now decide how much per click you’ll pay to get to your website.

Google offers some guidelines to help with setting your bids. It is a good idea to not exceed their suggested bids. Also, consider how much you can expect to earn for each ad.

Google might suggest that you bid $10 for a keyword that is $20 per product. To make it profitable, you’d need to convert half the traffic. 

Create a test budget

These test campaigns, as we mentioned above, are unlikely to be profitable. You shouldn’t spend too much money on them.

You should aim to get at least 100 clicks for your ads to determine if they are converting well. If you want to test ads targeting 10 keywords, with an average CPC of $2, then you can expect to spend around $2,000 on test ads.

If you’re new to Google Ads, it might be a smart idea to lower your budget and monitor your results once they are launched

Stop wasting money on ads that don’t work.

3. Optimize your campaigns

Data from your test campaigns can help you build more effective campaigns. Learn more about Google Ads. Optimize your campaigns for the best return. 

When you’re starting your first campaign, likely, you don’t have enough data. As you look over your campaigns, there are three things you should be focusing on.

Click through rate

Google Ads provides a lot of information about your ads. This is calculated by subtraction of the total impressions and views for each ad.

This data will show you which keywords received enough bids to display to users and which ones were clicked. 

It may seem like a small amount, but you only pay for clicks to your ads. A low CTR ad will not affect your Quality Score.

Your Quality Score is a rating Google gives your account based on your ad performance. It ranges from 1-10. They want their users to click on ads.

Your Quality Score will affect how likely your ads are to be seen by potential customers. Even if your bid exceeds that of a competitor, this is still true.

Cost per conversion

Next, see how many people clicked on each ad. Clicks should lead to customers or revenue.

It’s easy to see the difference in conversion rates. However, it is also important to look at your average cost per conversion.

You should keep ads that are less expensive than the sales they generate, and remove ads that have higher conversion costs.

If you find keywords with low click-through rates and high conversions it’s worth looking into the reason.

Sometimes, it’s simply because of too broad targeting keywords.

Let’s say you search for “running shoes” using your ad. People who search for this keyword are likely to be just beginning their search and not ready to buy right away.

This is a common problem for many keywords. You could advertise for particular brands or models of shoes.

Keywords that indicate purchase intent should be used. However, if your traffic is not converting, it’s time for you to look at your landing pages. 

If the page is not optimized,

Negative keywords

Add negative keywords to your campaigns based on the traffic you have not converted through your test ads.

To prevent your ads from appearing on search results for non-qualified keywords, you can add negative keywords.

You don’t want to spend your advertising budget on people who are really in need of “legal consultations” if you are a lawyer running an advertisement campaign. “

While you can almost guarantee these searchers won’t be clients, it is still possible to charge them clicks. If you do not use negative keywords to prevent your ads from appearing on the results page, you can almost guarantee that they won’t become clients. However, clicks will still cost as much.

To view a complete list of searches performed by users before you click your ads, navigate to Keywords > Google Ads Search Keywords Terms.

Searches that are not related to conversion should be added. This will help you avoid spending any budget on users that aren’t paying.

4. It is up to your overall strategy and how you adjust your Google Ads budget.

You will see positive returns after optimizing your campaigns. As long as you monitor your campaigns regularly, your ROI should increase.

This means that you have a budget limit on how much you can spend with Google Ads.

Most businesses have a marketing budget. A daily budget is a way to ensure you are not spending too much on the platform.

Increasing your Google Ads budget can help increase your online marketing results. A positive ROI each month will ensure that you get more sales.

Consider the rest of your marketing strategy. If your company is similar to others, you may need multiple channels.

Before you spend money on Google Ads, evaluate your marketing budget. You can do this by calculating the return on investment for each strategy and allocating more to the ones that provide the greatest return.

You shouldn’t change to Google Ads if your SEO strategy is producing great results for your business.

You can switch to Google Ads if you are unhappy with the results of local billboards and newspaper ads.

How to set your Google Ads budget

After you’ve calculated your Google Ads Budget, these are the steps to adjust your Google Ads Budget in Google Ads.

1. Login to Google Ads
2. Click “Campaigns” in the sidebar menu.
3. Select your campaign
4. Select “Settings” from the sidebar menu
5. Click “Budget”.
6. You have a new daily budget!

Professional assistance is needed with your Google Ads budget

Kobe Digital has years of experience creating PPC campaigns that work. This experience will allow us to launch successful campaigns for your business. We also help you determine the best Google Ads price to maximize your return.

We would love to hear from you and help you increase your revenue with Google Ads.

Contact us today to discuss campaign administration.