Google Ads: How Much Should You Spend Per Month?

Google Ads, formerly known as Google AdWords, is a pay-per-click (PPC) advertising platform that allows businesses to display their advertisements on Google’s search results pages, YouTube, and other partner sites. Deciding on a monthly budget for Google Ads can be a daunting task, especially when you’re unsure about the returns on your investment. However, understanding a few fundamental aspects can make this process more straightforward. Let’s dive into how much you should consider spending per month on Google Ads.

1. Understand Your Objectives

Your budget largely depends on what you want to achieve with your Google Ads campaign:

• Brand Awareness: If you’re introducing a new brand or product, you might spend more initially to create visibility. This might mean a higher budget at the start, which can taper off once you’ve established a presence.
• Lead Generation: For businesses looking to get potential customer inquiries or to grow their email list, cost-per-lead (CPL) becomes a significant metric. Estimate how much you’re willing to pay for a lead and multiply this by the number of leads you want.
• Sales: If your primary goal is sales, then you’ll be keen on the cost-per-acquisition (CPA). Knowing how much profit you make per sale helps in determining a reasonable CPA.

2. Research Your Industry

Different industries have different average CPCs (cost-per-click). For instance, the legal industry might have a much higher CPC compared to a clothing retailer. Use tools like Google’s Keyword Planner to gauge the estimated CPC for keywords relevant to your business. Additionally, investigate what competitors in your industry might be spending on Google Ads.

3. Start Small and Scale

If you’re new to Google Ads, it’s prudent to start with a smaller budget, monitor the performance, and adjust accordingly. A smaller budget allows you to test different ad copies, target different keywords, and understand which strategies yield the best results. Once you identify profitable strategies, you can confidently increase your budget.

4. Factor in Seasonal Trends

Some businesses, like those in the retail sector, might experience seasonal surges during holidays or specific months. It might make sense to allocate a higher budget during these peak periods and reduce it during off-peak times.

5. Calculate Your Expected Traffic

Using the estimated CPC for your targeted keywords, and the monthly budget you’re considering, you can estimate the expected traffic to your website:

Expected Traffic = Monthly Budget    Average CPC  Expected       Traffic = Average CPC Monthly Budget​

For example, with a $1000 budget and an average CPC of $2, you can expect around 500 clicks.

6. Monitor and Adjust Regularly

The digital advertising landscape is dynamic. The effectiveness of your ads can change due to various factors, such as competitors’ strategies, market trends, or changes in user behavior. Regularly reviewing your Google Ads account to adjust your bids, target new keywords, or pause underperforming ads can help you get the most out of your budget.

7. Consider Other Costs

While your budget primarily covers the cost of the clicks, don’t forget about other related expenses:

• Ad Design: If you’re using display ads or video ads, there might be costs associated with designing these creatives.
• Management Fees: If you’re hiring an agency or a professional to manage your Google Ads, their fees need to be factored into the overall monthly spend.

In Conclusion

The right monthly budget for Google Ads varies for every business, depending on their objectives, industry, and various other factors. While there’s no one-size-fits-all answer, by understanding your goals, researching your market, and regularly optimizing your campaigns, you can arrive at a budget that provides a strong ROI. Always remember that it’s not about how much you spend, but how effectively you spend it.