Post Updated: 29/10/2021
One of the most popular questions from business owners who have never run PPC campaigns before is ‘how much budget do I need’. Google Ads is often perceived as expensive, and it can be. So it’s important that it is set up and managed correctly as it can be easy to burn away your budget. So let’s dive into what a Google Ads budget could look like:
Click Budget vs Management Fee
With PPC, it often breaks down into two different types of costs:
Management Fee - This is the fee that you pay a consultant such as myself or an agency to manage your campaigns. Some charge by a percentage of your click budget, others have a fixed monthly retainer.
Click Budget - This is what you pay directly to Google for your clicks. We will get into the details of click budgets further below in this post.
How To Choose A Click Budget
There are two common approaches to choosing a click budget: What you can afford vs what results you want to achieve. If you are fortunate enough to have an uncapped budget, the best place to start is to think about what services or products you want to promote and what locations you want to target. From there, you can use Google's Keyword Planner to get a forecast for how much budget you would need to target those keywords.
If you are on a tighter budget, you can follow the exact same process but use the data from Google’s Keyword Planner to determine if you need to reduce the scope of your campaigns to better align with your budget.
For example, someone could come to me and say here are my 4 products/services, I have £1000 a month to spend, what would you suggest? But it could be that each product/service needs around £500 to achieve full coverage. So at this point, the client and I will discuss which 2 products/services we should focus on as a priority. It’s much better to have fewer campaigns that have enough budget to achieve full coverage, instead of more campaigns that are spread too thinly.
Factors That Determine The Budget
If you are in a position that you have a limited budget and are trying to figure out ways to reduce costs/scope, here are some ideas:
The more locations you wish to target, the bigger your budget will be. Why? Well by targeting more locations, there are more people to serve your ads to. There may only be 200 people in the UK searching for your product or service, but there could be 1000 in the US.
Google Ads allows you to be really specific with your location targeting, even down to choosing individual postcodes. So if you are looking for ways to reduce scope, think about targeting hot spots instead of a generic approach. Another good way to look at it is what locations tend to convert the best. If you get most of your business/sales from London and Manchester, for example, focus your budget on those locations until you have more budget to expand.
Number Of Services/Products
The more products or services that you want to promote, the more budget you will need. So think carefully when choosing what you want to promote. I always advise businesses that are new to PPC to choose 1 product or service that they are really confident in and test the waters with that. Once you have it performing well, you can then start to expand and introduce other products/services.
Generally, the more keywords you have, the more budget you will need. But there are some other factors to consider here.
The first thing to consider is how popular the keywords are. Some keywords can be fairly cheap, but due to them having high search volumes, the costs can quickly add up. You may find that leaving out the more generic but popular keywords helps save you some money.
The other thing to consider is the competitiveness of keywords. Some keywords can cost several times more than others. You can find out the average cost per click for keywords using the Google Keyword Planner. So bear this in mind when choosing your keywords.
According to a report by WordStream, the average cost-per-click for Google Ads across all industries is $2.69 on the search network and $0.63 on the display network.
Is There Such Thing As A Budget Too Small?
No, not really. I guess the thing to distinguish here is what is too small for Google Ads and what is too small for a PPC agency/consultant. Most PPC consultants & agencies here in the UK won’t work on accounts with budgets smaller than £300 a month, and for some, even that is too low. According to Google, businesses make an average of $2 in revenue for every $1 they spend on Google Ads.
Now I am a little bit different in that one of my specialities is helping small businesses with their online marketing. It can be really hard for a small business to get sound PPC advice without it costing a fortune. But in order to offer PPC management at an affordable rate, some of the luxuries have to be cut away. This is why we have designed PPC management for small businesses, allowing you to get expert support without it costing a fortune.
Here are just a few examples of different industries and their monthly clicks budgets from previous projects I have worked on in the past:
Roofers and tradesmen for a small group of towns - £300 a month
Self storage company in a large town - £500 a month
Tradesmen targeting a big city - £500-£1k a month
B2B company targeting the UK - £1k - £20k a month
But remember, these are just a few examples. The costs will vary depending on everything I have covered above.
If you still can’t make your mind up about what budget to start with, get in touch and I can point you in the right direction.