How Much Should I Spend On Google Ads

In today's edition of Digital Marketing Mastery, we talk about Google Ads and how much of your marketing budget you should spend on them.

Making sound budgetary decisions is extremely important for promising results from your marketing initiatives.

Therefore, marketers need to make wise calls when allocating budgets to different marketing platforms and campaigns.

It’s no secret that it’s essential to achieve a higher rank on Google in today’s day and age. However, the competitiveness and process of organic search engine optimization is not exactly straightforward.

Although no business can skip SEO, PPC (pay-per-click) provides a competitive edge with some long-term benefits for a digital marketing strategy. This is why 65% of small-to-midsize companies invest in PPC advertising.

Google Ads is a widely successful digital marketing wonder, revolutionizing PPC. It delivers exceptional ROI (return on investment) of $8 for every $1 spend.

Typically, small to midsize companies spend around $9,000 to $10,000 every month on Google Ads, not including the additional costs like software management, monitoring, etc.

For online marketers, budget allocation is crucial as it determines the maximum amount one should spend on a particular marketing campaign. They need their money and efforts to reach the targeted audience to increase leads, boost sales, and other KPIs.

If your business is looking for professional help to manage the ad spend of your business on Google Ads, we can help.

Budget Allocation For Google Ads

To run ads on Google, a business needs to decide on the appropriate budget and bid options.

The budget determines a charging limit for each campaign, so it has to be an average amount your business would be comfortable spending per day. However, the actual cost may be lower, depending on how the business manages its bids.

To help businesses execute a proper budgeting strategy for Google Ads, we’ve put together this guide, broken into three easy-to-understand sections:

  1. Determining the initial budget of Google Ad
  2. Allocation spend across different campaigns
  3. Planning new campaigns

Planning out an initial budget in Google Ads shows how much a business can spend on an ad campaign daily for over 30.4 days – or a month. While the daily budget may vary, the total spending cost will never exceed the business’s overall budget.

The formula mentioned below can be used to decide the budget for Google Ads:

Monthly Budget / 30.4 = Daily Budget

Apart from using this formula, you have to calculate the cost per click. It helps you find the average CPC for the chosen keywords and can be done using Google Ads Keyword Planner.

Budgeting for Google Ads involves in-depth research into the business, its goals, objectives, and audience. The following tips can assist you throughout the process and research in setting a business budget for Google Ads.

Tip #01: Utilize Google Keyword Planner

When running a campaign on Google Ads, the vital step is to decide which keywords your business wants to target. Instead of running separate campaigns, use Google Ads Keyword Planner for research.

For example, suppose you are running a Google Ads campaign for a targeted audience, let’s say, people interested in video editing costs. Then, the keyword which needs to be targeted will be.

“cost of editing a video.”

Once you’ve searched a query, the planner will provide you with:

  • Comparable keywords
  • How many keywords are searched monthly
  • The number of marketers competing to publish these key phrases
  • A comprehensive recommended Google Ads bid

Tip #02: Run A Pilot Campaign

Running a test campaign on Google Ads can help businesses narrow down which tactic works and which doesn’t. Consider it as a test drive you would take to examine your preferred vehicle.

When planning a campaign, it’s important to understand that it may not always be profitable. So, a test campaign delivers your original traffic and budget, allowing you to make changes to it. It helps in making informed decisions to give better ROI.

Tip #03: Set A Budget, To Test It Out

As stated above, test campaigns won’t always be profitable. And it’s okay, meaning you don’t have to spend all your money to run them.

However, it’s essential to receive a minimum of 100 clicks per ad to understand whether conversion happens for your business. For example, if you have planned a test ad for 20 keywords with a standard CPC (cost-per-click), your budget for this test ad should be $4,000.

Tip #04: Optimize The Campaigns

Test campaigns provide valuable data to produce effective campaigns to move forward. Whether you’re running a test campaign for the first time or have been doing it for years, there are two elements on which you need to focus:

Click-through Rate (CTR) – So, Google Ads provides tons of data for every ad. A valuable data metric is CTR or click-through rate. It’s a ratio that shows how frequently people see your ad or your product listing has been clicked. CTR is highly beneficial to understand the performance of your keywords, ads, and campaigns.

Click-through Rate = Number of Clicks / Impressions x 100

With CTR, one can determine which keywords have a high bid to the audience and which ones are clicked. These insights give a better idea to narrow down the best keywords and bids.

Cost-per Conversion (CPC) – The next step is to check the data metrics of the audience who converted subsequently to clicking an ad. It’s important to know which clicks translate into conversion since you pay for each click. It would help if you also looked at the average CPC.

For instance, if a campaign has produced an average CPC of $5 and the worth of your standard sale is $25, then you’ve earned a significant ROI. However, if it’s just a few bucks, this could end up winding your whole business. That being said, it means that the cost per click should be less than the generated sale.


Planning a Google Ads budget can be challenging, but it’s the most profitable and critical element of digital marketing strategy.

If you feel unsure about creating a budget for a Google Ads campaign. the experts at Epitome Digital Marketing can help you research and launch the perfect profitable campaigns for your business. In addition to this, we can also assist you in determining how much money should be allocated to receive the best ROI.

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