How Much Should You Spend on Google Search Ads?
How much should you be spending on Google search advertising? The answer, of course, depends. But some good things to consider are the size of your potential audience, your budget, and the relative competitiveness of your industry and the keywords you’ll be bidding on. There are no hard rules or numbers, but here are a few things to consider when starting up a new Google Ad campaign.
One of the best features of pay-per-click advertising is budget flexibility. The realm of possibility of Google Ad budgets extends from $0-a-day to whatever it would cost to place targeted ads on all 8.5 billion google searches a day (a lot).
Fortunately, through selecting specific keywords that potential customers use to find businesses like yours, refining locations to target people in the areas you serve, and other refining tools, there’s a finite amount of relevant search traffic that you should be targeting with ads.
• Get an idea of search volume for your industry and location.
If you sell used cars nationwide, there are 823,000 monthly searches in the United States for that term alone. If you sell plumbing supplies and keep your business strictly in Wisconsin, you’re going to be bidding on 880 monthly searches for “plumbing supplies.”
Once you have an idea of how many people are searching for your products or services in an area you can do business in, it’s a lot easier to get a sense of what size budget it’s going to take to advertise on all or a portion of that traffic.
• Set a target for the number of leads you’d like to see from your ads.
Before you decide how much to spend on pay-per-click advertising, it might help to think about the number of qualified leads you’d like to see from your campaigns. Are you looking to stack up a pile of 25 quality leads per week that your whole sales team can follow up on? Or are you looking to boost your prospects by starting a few conversations per month? Those budgets are going to look very different.
• Consider the competitiveness of your industry.
All search terms are not auctioned at equal rates. The search term “auto insurance” carries a hefty price tag—an average cost-per-click of $16.85. That’s a lot more than, “CNC machine” which runs at just $1.09. If an insurance company and a machine manufacturer wanted to boost their web traffic with 100 paid clicks a day, the insurance folks are going to need to spend $1,685. The machine manufacturers will need just $109 per day.
Of course, the value of a conversion for these two keywords are also likely very different—ultimately, the competitiveness of any keyword is a factor of how high advertisers are willing to bid on each search.
Especially at the low end of budgets, it’s important to consider cost per click. If both companies in this example have a $300 a month budget to “try out” Google Ads, they’re going to have very different results. $10 a day isn’t enough to put together competitive bids. Google distributes budget on a monthly schedule, so it’s possible the campaign would generate a few clicks, but the results won’t be representative of the results garnered by a more robust budget.
[Important note—Google will adjust your budget by as much as 200% percent a day, so you might spend more than your daily budget to compete on expensive keywords, but your monthly spend will never exceed the monthly sum of your daily budget]
On the other hand, the machine shop spending $10 a day won’t see any business-changing results for that kind of money, but the ten or so clicks they get a day should give them a good idea of what might happen if they scaled up.
The Google Ad platform allows you to spend as little as $1 a day on advertising. Sometimes folks make the mistake of thinking a sliding scale means that Google Advertising is cheaper than other forms of advertising. It might be possible to spend less, but that doesn’t mean you’re better off with an insufficient budget. You wouldn’t run $10 of advertising in the Star Tribune on a Sunday.
• Once you have a Google Ads campaign and model that works, scale it up!
If you’ve been running a Google Ad campaign for a couple months and you’re seeing good leads come in on a regular basis, and your business could handle more, consider increasing your advertising budget. There are a lot of bells and whistles inside the platform to help you calculate your return on ad spend. Use them to your advantage and scale up your budget once you’re seeing results.
• Don’t start with less than $1,000 per month.
Do you still need a hard figure? This is it. We recommend starting a new Google Ad campaign with no less than $1,000 per month as a rule of thumb. From there, it’s easy to adjust in a relatively low-cost environment, and those adjustments will pay dividends when it’s time to ramp up your budget.