Google Ads Budget: How Much Should You Spend?

How to Manage Google Ads Budget for Small Businesses

Starting a business can be a bit tricky. At this particular stage, you are not quite sure of where to begin and what ways to generate traffic. A simple way to find customers for your startup is by using Google Ads or hiring a Google Ads Agency to do the heavy lifting for you. This is a powerful tool for small businesses looking forward to generating leads and enjoy a great return on investments. Just like any other investments, you must first set a budget for Google Ads. So, how much do you spend on Google ads per month?

How Much Should You Spend on Google Ads?

Since you are in the testing part of the business and don’t know what’s going to work for you, try to keep the cost as low as possible. The testing phase of your business may be profitable, but there is also a chance that you may just break even or face a few loses. Even though your business may prosper and gain profits, you should not necessarily expect a good return at the start. Instead, you should have the mindset that you are investing in market research. This way, you will be able to identify and understand the keywords that convert clicks into leads.

How to Set Google Ads Budget in the Test Period?

If you know the keywords that generate leads on your site, you can calculate your budget by multiplying the number of words by the cost per click. The general rule is that you get at least 100 to 200 words and determine whether they convert for you. For instance, if you decide to test ten keywords with a CPC of one dollar, it is recommended that you have a test budget of $1,000-$2,000. There is always a chance your combination of words contain both winning and losing keywords. In this case, drop the losing and retain the winning keywords to bring your business to profitability.

How to Set Budget for Google Ads after the Testing Phase

If your business is running at a profit, ask yourself the big question: How much will you spend on Google Ads per month? The most successful advertisers out there know that effective advertising is among one of the best investments you can make in your business. This way, there is no reason to cap their budgets. Think about it; if you have been investing 1 dollar on Google Ads and had $1.25 as returns, you’d probably want to invest more of that than putting a cap on it.

Focus on the Return of Investment Rather than Cost

If you want to make it to the top as the dominant advertiser in your market, you need to do more than just managing costs. Focus and dedicate more of your energy to advertising and maximizing your returns on investment. So, how do you get to the point where you are capturing more shares in the market? Simple, focus more on earning per click, not cost per click. Most of the advertisers focus more on their cost per click by trying to write better and improve their Google Ads quality score. Focusing on how to increase your earnings per click will help you outbid your competitors and gain more leads as well as customers.