How to Determine How Much to Spend On Google Adwords

how much to spend on google adwordsHere’s what PPC or Pay-per-Click Advertising is all about:

  • It’s one of the most popular internet marketing service
  • It’s offered by today’s top search engines like Google, Yahoo and etc.
  • Advertisers place ads based on a particular search term
  • It works on a bid system
  • The highest bidder for a certain search term will have their ad shown
  • It offers more visibility which could mean more business!

There you have it. Since today’s search engine supremacy is ruled by Google, everyone knows how powerful Google Adwords can be to most advertisers. Sounds profitable, right? But the question is, how much should you allocate for your PPC – Google Adwords budget?

PPC or Pay-per-Click Advertising is considered the most cost- effective internet marketing service offered by major search engines. Compared to traditional marketing approaches, PPC is less expensive. This is growing to be a viable marketing strategy nowadays, given that for a relatively small budget, it usually yields greater return on investment, which can be measured by the number of visits and conversions that a website gets. This is particularly helpful for newly launched websites and those that are not yet visible in most search engine results.

Take a look at some of the benefits that a campaign with the right amount of PPC budget receives:

  • The power to dominate in specific keywords. You’re actually placing your products and services right in front of your market when you have the exact keywords used by your targeted searchers.
  • The option to pay only for successful marketing. In PPC, the advertiser only pays when a user clicks the ad. This means that you only pay not just for the ad views but also for the searchers’ visits.
  • The easy tracking of your advertising budget on a daily basis. This means that you have total control to adjust your budgets, keywords and related factors according to your needs.

Initially, it’s usually somewhat complicated since there is no fixed price for PPC. But paying for the set-up fee and monthly fee won’t hurt you financially as the succeeding months’ budget will entirely be placed under your control, once you’ve determined what is working and what isn’t.

In terms of ROI, expecting good results with less than $500 per month is unlikely to happen. How do you calculate how much to spend?  Here are some helpful tips.

1. Let’s say your budget is $500 and the minimum cost- per- click is $1.00. This translates to 500 clicks and landing page visits within a period of 1 month.

2.  The 5% conversion rate could mean you will get a total of 25 leads or sales. As the pricing of products or services also factor in, you could get anywhere from a 0.5 to 10 % conversion rate, but expect closer to 1%.

3. Finally, compute your sales price and your profit margin.  That’s exactly your ROI per sale.

This is the reason why your PPC budget should be sufficient enough to generate as many clicks and traffic to convert into sales and gross profit to override the expense. And since Google Adwords and the rest of the PPC services are generally bid based, it usually takes time to evaluate how much to spend on bidding.  You can actually do some “testing” to see if it works for you wherein you can investigate and ultimately determine the right budget for your own campaign. You can get the most your Google Adwords budget when you work with a company that has expertise in Pay-per-Click Advertising.

A good PPC company should help you with the following services:

  • PPC campaign management
  • Keyword research and development
  • Search Engine Optimization
  • Geographical targeting
  • Reporting
  • Daily budget testing

How much to spend on this service is entirely a subjective matter. But, along with keyword research, targeting techniques, testing, good ad copy and landing pages that convert, which will certainly take time to develop, it is possible to eventually build a PPC budget that is calculated and effective.

This popular advertising service is one of the most inexpensive methods to expose your business.  But it takes maximizing the processes and using the right  tools to make your campaign a success. Both small and large businesses often do not have expertise to maintain a successful campaign. Thus, trusting this campaign to a reliable PPC Internet Marketing Company that has Adwords Qualification or Google Certification is usually the easier way to ensure greater returns on investment.

Regardless of the size of your business, Roja ensures that our clients can quickly proceed to the most productive approaches based on their needs to maximize their PPC budget.

Contact us for a Free Consultation. 

One response to “How to Determine How Much to Spend On Google Adwords”

  1. Nading says:

    Thank you for the good writeup.

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