Google Ads is a powerful tool for getting your business in front of customers right when they are searching for relevant products or services. When your ad displays at the top of the search results you increase brand awareness, drive traffic to your website, and generate leads. A successful Google Ads strategy combines relevant keywords, well-written ad copy, and a strong landing page. But, how do you know what your monthly budget should be? Below, we give you simple steps to determining your Google Ads budget in order to achieve your paid search goals.
Find & Research The Right Keywords
The first step to determine your Google Ads budget is researching keywords you want to bid on. These are the keywords and phrases your customers search for to find you so try to be as specific as possible. Broad keywords are often more expensive and less relevant.
Google Ads has a free tool called Keyword Planner that can help you discover new keywords and historical search volume and cost data for those keywords. In your Google Ads account, you can access Keyword Planner under Tools & Settings in the upper right. To access Keyword Planner, you will need a Google Ads account, but you do not need to set up billing or campaigns yet (even if Google prompts you to!). Keyword Planner is 100 percent free.
Once you are in the Keyword Planner, select Discover New Keywords and type in a keyword or keyword phrase. Keyword Planner will show you the historic average monthly search volume for that keyword, as well as make recommendations for related keywords to help you build your list. If you only offer services or products in a specific region, make sure to select your location. You can also look at different time spans.
You can also use Keyword Planner’s keyword discovery tool to see your competitors’ keywords by entering in their url and selecting “use the entire site.”
Want even more competitor insights? Tools like SEMRush and SpyFu allow you to discover what keywords your competitors are bidding on and even see previews of their ads. This will not only give you new keyword ideas but will show you how much those keywords cost your competitors and how much it will cost you to out-bid them.
Similar to the Keyword Planner, these tools can give you monthly volume data as well. You may see a discrepancy between the two, but checking multiple sources of data will give you a fair estimate rather than relying solely on one source.
Get Forecasts for Impressions, Clicks & Cost
Now that you have your list of keywords, you can use the Keyword Planner tool again to see forecast and determine an estimate of what these keywords will cost you. Add your keywords into the planner and you’ll be sent to the forecasts tab for that set of keywords. Google gives you an estimate of how many impressions, clicks and average cost per click (CPC) your campaign is likely to receive with these keywords. You can also select a specific location and date range for your forecast.
Try adjusting the max CPC to determine how your campaign would perform with a bid adjustment. You may see that more competitive keywords require a higher maximum CPC to get results. If you adjust the campaign max CPC from $3 to $9 you will quickly see your daily budget increase. It may not be necessary to have all your keywords with a max CPC of $9, but it will show you your estimated results with a larger Google Ads budget.
Then, go through your keywords and adjust their individual max CPCs to see if your impressions and clicks increase. Some may result in a change, others may not. Compare the impression and click values to these multiple scenarios and see if raising the max CPC substantially improves performance. If it doesn’t, this means there is not enough search volume for those keywords to warrant a higher CPC and there is no reason to increase your budget. Good news — you have found your Google Ads budget limit!
You can also “add conversion metrics” by estimating a conversion rate. Depending on the conversions you are tracking (e.g., form fill, phone call, get directions), it’s usually a good idea to underestimate the conversion percentage, so start with 1-3 percent. Keep in mind that as you add keywords to this plan, your performance forecast will change. Use this tool whenever you are planning to add more keywords or if you intend to continue your research at another time.
The Keyword Planner tool is an easy way to discover keyword ideas and determine how those keywords would perform based on varying CPCs. While the data in Keyword Planner can vary, using this as an estimate will help you form your Google Ads budget. If you are starting a Google Ads account from scratch or are creating a new campaign, the steps above should help you feel confident in finding a budget that works for you and your business. Having trouble managing Google Ads? Get in touch and let us help you attract more customers.