Google ads operate similar to a vast business market where customers purchase traffic for their sites. This means you can come in with your specified monthly budget to acquire a basic plan that fits your budget and your business.
However, to get the traffic you deserve, you need to bid on specific keywords relevant to your business industry and the products and services you are dealing with. How to calculate Google ads budget is one of the toughest that you can encounter in this sector.
Like any other market, the competition on Google ads is on another level and requires impeccable plans to emerge as a winner. Also, you need to set up a reasonable Google ads budget to help you attain your goals in business.
You need to think carefully when calculating your Google ads budget and your choice of keywords. This article discusses how you can calculate your Google ads budget and the essential factors to consider.
Calculating Your Initial Google Ads Budget
To get a clear glimpse of how much you need to spend on Google ads and the amount of traffic you are likely to get, you need to have realistic expectations about what you are doing. To determine your initial budget, you have to elaborate further information about your goals.
This is a good idea that perfectly works for those just starting up. After having your goals in business, you need to agree with them and discuss them further with other business stakeholders.
For instance, you intend to gain one hundred new customers. You have a conversion rate of 4%, and your average cost per click in your business industry is $2. You need to spend $50 to gain one new client and $5,000 to acquire one hundred new customers.
You only need to take the desired number of clicks and multiply them with the average cost per click to get your Google ads budget.
On the flip side, you might have an initial budget, and you want to know the number of clicks you will receive within the budget you have. Divide your initial budget and the average cost per click to get your approximate traffic.
If you don't have an idea and want to determine the budget for Google ads, but you have a clear picture of how much traffic you need to get, multiply your desired number of clicks by the average cost per click of the Google ads.
Having the above clear picture in mind, you have the decision hands-on on how much you intend to spend on google responsive search Ads. Besides, it would be best to focus on your business goals and the level of traffic you intend to drive into your site.
Note that some companies channel a significant amount of their investment into Google ads, others do it once in a while, and other companies never do it.
Factors that Affect the Cost of Google Ads
Competition
Your competitors' budget and the level of aggression play a key role in online advertising, especially Google ads. This is a major factor since the bigger the budget, the better the outcomes. However, it also depends if you know what you are doing.
If you are working as an SMB, it is challenging to compete with massive business enterprises with a solid working foundation. Using the support from Google ads, you can easily elevate to the helm of the industry.
Contrary to SEO, Google gives you a chance to appear on the first page even if you are a beginner in the industry. To invest in a healthy business competition, you need to give Google ads a shot.
Keywords
When creating a Google ads campaign, you will come across numerous keywords closely related to your industry of specialization. This does not mean that you need to incorporate all of these keywords in your Google ads.
You need to conduct in-depth keyword research to find the best keywords that match your business operations. The extensive effort you divert into keyword research, the higher the chances of emerging victorious.
Also, pay attention to the market size, also known as the keyword volume. Focus on bidding on the keywords of your business brand to grow awareness. If you have done extensive research, you will likely get loopholes that will back you up.
Location
Contrary to the old-school advertising methods, the prices of Google ads differ from one place to another. This depends on the popularity of the given location. Using Google ads from different places charges differently depending on the population.
In addition, making advertisements in various geographic locations matters a lot. Advertising your business in various areas is likely to generate significant amounts of income compared to other places across the globe.
Time
The days and times you make Google ads and make them visible to your target audience affect the amount of money you will pay. You don't want your ads to be shown when your target audience is asleep.
Also, you won’t need your prospects to call you when you have already closed your business. This means you need to pay for the ads to reach your desired audience at the right time. Other things include holidays and other big events.
Because many people are always online at this time, your ads are likely to be displayed often for the well-being of your business.
Industries
The budget stipulated for Google varies from one industry to the next. Some industries charge super high or low depending on the business you are operating. It is essential to evaluate your business industry and its charges for Google ads advertisements.
Bottom Line
Developing a Google ads budget is quite a daunting task. However, this is the most crucial part of developing your marketing strategy. It calls for a clear business mind and goals you intend to achieve with the aid of Google ads. Note that your initial Google ads budget mainly depends on your industry, outlined above.