What Should My Budget be for Adwords?

What Should My Budget be for Adwords?
Simferopol, Russia - June 22, 2014: Google biggest Internet search engine. Google.com domain was registered September 15, 1997.


If you’re new to Adwords then the one of the first questions you are going to ask is: “How much should I budget to spend per month on my campaign?”

The short answer is always “Whatever you are comfortable with spending” – But that may not be realistic. Of course you want to spend as little as possible and see as much back as possible but that is what everyone wants and the truth is this:

Your Adwords budget should be relative to your industry, your number of products or services and your competition.

These days, there are few terms that you’ll be securing a position one click for with a small budget. For example, some of the terms relating to personal injury lawyers are £65 and upwards PER CLICK. Not per enquiry or per lead… Per click.

You need to be prepared to put a good, sensible budget behind your account or face disappointment from the start so ask your Adwords manager what they would recommend after reading the tips below

Set a Budget you are comfortable with and go from there…


What Google Says:


For a brief overview of what Google itself says check this link.


Budgets Are Relative


Quite simply, your budget will likely be relative to your industry.

For the most part, the days of a few pence a bid re gone (Excluding certain branded terms) so you need to be prepared to put your money where your mouth is in the early days and yes, it can be a bit scary and feel like an expense.

If you sell expensive products or services then the chances are your competitions are going to be backing a lot of your ideal key terms, thus upping the bid you need to make. You may not be able to touch some of the head key terms for a while given that your competition may have stablished accounts with plenty of data and they are confident that their spend will see a return. You will need to allow time and data to show where you can get the biggest wins.

So make sure that if you are in a crowded industry against established advertisers, you have a decent budget to get into those top of page positions… Often a tenner a day won’t help if you are bidding on terms that are a few pound a click.



Test, Measure, Expand


Business growth red graphic relaunched with a trampolineEvery budget has to start somewhere and your two primary concerns in the early days will be what you can afford vs what is realistic.

We can use Google’s Keyword Tool (adwords.google.co.uk/KeywordPlanner) to give us rough ideas of budgets but this is a very simplified projection based on a handful of keywords you enter and not always directly relatable to a functioning Adwords account.

The best way to see what budget you need is unfortunately to actually have an account up and running. In the first week or so, why not try advertising the things you’d (ideally) like to advertise and see where the data falls. This will often highlight the areas that will be too costly in the early days, so you may want to pause and come back to those later, though hopefully you’ll see some conversions dropping in that give you a good indication that there may be certain areas to direct budget into.

Before broadening the campaign, you must let it stabilise and bring returns, ideally concentrating on a set number of areas and making them work.


Geo-Targeting / Limiting Service & Products, Picking an audience.


You may achieve better results by simply cutting down the amount of people you wish to advertise to, narrowing the area you wish to show those ads within or even who the ads display to.

Instead of spreading your budget across multiple product ranges or services, identify your most profitable areas and let your Adwords Account Manager know. This is especially effective when you have a small budget and helps protect you a little bit. You won’t be able to compete with established competitors when you have a limited budget so targeting certain areas locations, your audience or limited the ranges you advertise will certainly help.



Remember That Adding To Your Campaign Will Impact The Budget


Depositphotos_59611953_sIt stands to reason that the more keywords you bid on, the more it will cost you. If your account is showing a return that you are comfortable with but you add more products / keywords / services to the mix I would recommend setting them a separate budget so it will not  impact to heavily on the others areas that will be converting.

As mentioned above, if you concentrate your efforts into a set number targeted areas, get them working and then start working on other areas, expect a bit of a dip in overall performance… You can allow for this by setting a separate budget but you may also want to consider that if you are limited by budget then simply increasing the budget into the areas that re working will actually help your margins.

So in short, before spreading the net wider, get a bigger net to catch more of the fish you’ve been catching!



The Bottom Line


As a business you likely will limited by budget for a long time on your Adwords account and in many cases, you may always be limited by budget on some campaigns. There is no way around this if you are in a competitive industry against established players who have been running Adwords for a long time and have a huge budget to ensure domination of the head terms.

So pick a budget you are comfortable with, limit the product lines or services you wish to advertise and try to get those converting profitably. You may even need to keep limiting your products or services until you have a solid bit of budget and data for those areas but bear in mind that to make Adwords work you need to be seeing conversions and the thinner you spread the budget, the longer it will take to gather data and potentially you could be months or even years before it is profitable. So maintain a realistic outlook and if your budget is not working, either limit your account or spend more… Eventually with the right Adwords management you will get there!