How Much Should I be Spending on Google Ads / PPC?

In Paid Search by Dewan Chapman

AdWords Spend

Every industry is different, and every business within each industry has a different marketing strategy. Saying this, every business is always looking for ways to increase the amount of customers buying their products, but not every business will value the same way in which to market, and not all marketing strategies work for every business. This may all sound quite mind boggling, but marketing, budgets and making sure you get a return on investment (ROI) is very important to ensuring your business is successful. If you have chosen to invest in online marketing and you are unsure of what you should spend on Google Adwords/PPC, hopefully this article will help you establish the correct budget for you.

What should I Spend on Adwords/PPC?

If only there was a blanket answer to this question, it would make so many people’s jobs out there so much easier. However, the answer is… it depends! The determining factors of how much you should spend on Adwords/PPC varies and this article will walk you through what you need to consider when determining your Adwords/PPC budget. Right from the start, you need to remember that what you are going to spend on your Adwords/PPC budget is dependent on the industry you are in, as what businesses are required to spend fluctuates from industry to industry. So, let’s take a look at what factors are going to influence your Adwords/PPC budget.

Set Up Your Goals

When you decide to journey down the road of online advertising, it’s important for you to set up some realistic goals. There’s a good chance that Adwords/PPC is not going to revolutionise your business overnight, it may but there’s a good chance that it won’t. When you are starting out in Adwords, keep in mind that you are establishing a history with Adwords and you are on the road to gathering data initially before you can make huge strides and see a good ROI. If you are a small business offering a top quality product and service, getting 5 new customers a month is a more realistic goal than getting 20 new customers a month.

Keywords Affect Your Adwords/PPC Budget

When you, or an agency, is setting up your Adwords account, keywords are chosen to ensure your ads are showing to the relevant searches. Each keyword has a different price attached to it, and this price will fluctuate slightly as Google Adwords is a constant auction. This ensures you pay the best price for your keyword, and in turn, the click you receive on your ad. This may sound a bit confusing, so think of it this way, if you are a company that provides a home cleaning service in Durban and surrounding areas, your keyword may be “cleaning”, but that keyword could be linked to people looking to clean their cars or garden, so that keyword may be cheaper, but it will probably bring you a whole lot of traffic you don’t want, and that would be a waste of budget. However, if your keyword was “home cleaning services”, that keyword would probably cost you a bit more, but it will streamline the searches making sure your ads are showing to the relevant search enquiries. Choosing your keywords carefully will help you get a better idea of what your budget needs to start looking like. You can find out the average costs per keyword by using tools like Google Keyword Planner.

Test and Optimise Your Adwords/PPC Account

Once you have set up your realistic goals, and you’ve chosen amazing keywords, it is time to start testing how well your ads are doing. Testing is a hugely important step when it comes to online advertising. One of your ads may be performing incredibly well, so you are seeing some amazing results coming from that ad. But, an ad in another campaign may not be doing so well. This is when you can start looking into whether your keywords are relevant, if your ad is worded well, and you will be able to start shaping the ads better as you get more data. Remember that quality score plays a huge role in what you will spend on Google Adwords, so optimising your ads will only help you stretch your budget even further.

Where to Start?

A good place to start small would be around the R3,000 mark. This amount will start getting traffic coming through to your ad, and will enable you to start collecting the data you need to start shaping your ads and keywords better. However, a limited budget will give you limited results. Starting off with the mindset that this is going to give you good data in your industry field, is more beneficial than expecting quick results.

The Key Factors to Remember When Deciding Your Budget for Google Adwords/PPC are as Follows:

  • Set realistic goals for your business
  • Shift your mindset from gaining customers to gaining data for the first period of time
  • Choose keywords wisely
  • Test and optimise to improve quality score, this will stretch your budget

Google Adwords/PPC is an excellent way to invest in advertising. Keep in mind certain key factors and give your account time to generate the data you need. This will help optimise your marketing and will enable you to keep your strategies at the cutting edge of your industry.

About the Author

Dewan Chapman

Hey, my name is Dewan. I have  been an integral part of the Kaomi family since early 2017. I gained the majority of my digital experience from working in an international agency, collaborating alongside some of the best practitioners in the industry. My deep understanding for business management, finance and marketing came from the academic studies I achieved while working in a large corporate retailer. I excel in building long lasting client relationships and am strategic in my thinking and execution.