How Much Should I Spent on Google Ads?

Google Ads has been a staple in the digital marketing category. In 2021, Google emerged as the leading digital marketing provider, dominating digital advertisement spending and underscoring the significance of Google Ads in digital marketing. The story of Google’s success highlighted companies’ importance in generating leads. Hence, it has become the leading marketing tool for digital marketing worldwide.

In this article, we will answer the question at top of everyone’s mind – “how much should I spend on Google Ads?”. 

Of course, Google Ads campaigns will differ, and the most straightforward answer to all your questions would surely be – it depends. But, as we go on, we will see how much of your monthly budget ad spend should you put into Google Ads (formerly known as Google Adwords). Let’s dive in!

This article is a segment of a more extensive piece about Tips for Google Ads Optimization.

But How Much Should You Spend?

Well, it’s impossible to say. As whitesharkmedia suggests, you can’t get a lot of clicks for a few bucks. It just does not work that way. As you get more information about your customers, you should aim to get six clicks daily. Thus, if your Cost-per-Click is 5 dollars, then your daily budget should be 30 dollars. 

Every single industry would have a different amount of money to get to the customer. So, as the Instapage tells us, you need to do those calculations yourself. “For Search, the average mobile CPA across all industries on Google Ads is $80.89. It’s much higher than that on the Display network, at $148.68”. 

Nevertheless, the goal of your campaign will determine the outcome. So, if you’re trying to achieve a lot in a short period – you will have to put out some money. Some studies suggest that it should be anything from $1000 – $10,000, but there is no benchmark. Depending on where you live, what you’re advertising and how rare your keywords are – it will all influence your ad cost and change depending on the situation. So – beware and good luck! And now, let’s talk about all the factors to include in your analysis!

What Factors Should You Take Into Consideration?

There are plenty of things that can influence your Google Ads campaign. As we have mentioned before, your Google Ads fees will highly depend on how you categorize Google Ads. There will be different prices for real estate, travel, and legal services. So, it all depends on what you are trying to do, and what you are trying to do it with. Let’s explore different options to see how they can affect your Google Ads (formerly Google Adwords) budget. Let’s dive in!

Business Goals

Starting with – business goals. Your average daily budget and marketing spending will change depending on the goals you want to achieve. If you need 100 people from the local community – it will cost much less to promote your business than marketing on a global scale. Similarly, if you want to sell car insurance, it’s different than selling a car. Depending on the business goals you will be setting for yourself, you can expect different results and, in the end – different outcomes.
In the context of business advertising goals, a well-crafted Google Ads strategy is indispensable. It ensures targeted outreach to the right audience and facilitates the measurement of campaign effectiveness for optimal results.

Business Objective

The main role when it comes to your business PPC advertising costs is definitely the amount of objective you want to achieve. There are different costs for brand awareness ads, different for Display or Video campaigns. Lead generation and Conversions are among the most expensive, so those will be the harshest on your Google Ads budget.

Competition

The more competitive your industry is, the larger the budget you may need to be visible and outbid the other advertisers. If you want to compete in a highly competitive market, you will need a much greater budget. For example, business services have a cost-per-click of almost 60 dollars. As every little cent matters, you may find yourself in a situation where you have a lot of keywords that will get you clicks, but you will have to pay a lot for them.

Seasons

Additionally, for seasonal products – it can be harsh for your budget. As you can imagine, getting the right advertisement at the right moment can be costly. As Google points out, we make every decision by checking it online. In 2022, an online search was used before 96% of in-store holiday shopping occasions, according to Google. So, it’s only understandable that during peak season – it’s all about getting those customers hot and ready for some new products and services. 

Customer Lifetime Value – CLV

Next, we have the Customer Lifetime Value aspect of your ad campaign. It’s a metric used to assess the total net profit that a company can get from a customer throughout the entire relationship between them. If you have a high CLV, like with the subscription-based models for videos and such, you will want to invest a little bit more into your advertising, as it will come back to you with each month, week, or whatever time frame you are using.

Country 

Another big thing about your budget is the country you are from. Of course, getting money in India will be much cheaper than in the United States. So, based on the specific regions, your ads will be more or less expensive. 

Target Audience Google Ads

Another important aspect that will have a lot of impact on how your ads will look in the long run is your target audience for Google Ads. Depending on the gender, age, and many other factors, it will be an inexpensive ad or something astronomical. 

Online marketing through advertising channels can be different based on every single aspect of who you are targeting, so if you want to make an efficient ad, you need to consider that. Here are the main elements to keep in mind in that regard. And remember to use Google Ads Keyword Planner! And now, let’s dive in.

Competition

You also need to consider your competition. With various costs coming your way, you will be tempted to choose the cheaper options, which could be devastating for your paid search escapades. The more competitive your industry is, the higher the prices for the bidding will be. So, the fewer advertisers in the market, the fewer costs.

Demographics

Each age group or gender can be differently priced. According to the Digital Audience Report, the characteristics the Most Valuable Audience generally has in common include:

• Income above $76,900 a year
• They are aged 21-34
• They are white-collar professionals or students
• Live in a city and like foreign travel

All of those elements can be pretty detrimental to your budget, but on the contrary – you will have great potential when it comes to buying power. 

Geotargeting

Even more, the costs will vary depending on the location of your targeting needs. In highly competitive places, like in the Case of the US, or Europe, you will have a lot of trouble getting past many different advertising companies. 

Lookalike Audiences

On the other hand, not everything has to be extremely expensive and on the plus size. You can always choose lookalike audiences. That way, Google Ads will show you audiences similar to what you were after and get some high-value customers without creating an entirely new advertising campaign. 

Seasonal Targeting

Another thing on the costly side is the seasonal targeting. As we have mentioned before, not only when it’s your business goal but also when it comes to targeting – it’s pretty expensive. Seasonality adjustments are an advanced tool that can inform Smart Bidding of expected changes in conversion rates for future events like promotions or sales – as Google says, and if there’s more money involved, then there are more bidders, hence – more expensive targeting.

Retargeting

And finally, we have the retargeting option. It’s one of the key elements when it comes to successful bidding. An excellent retargeting campaign can bring you a lot of conversions. 

As Spiralytics states, the average CTR for display ads is 0.07%, and the average for retargeting ads is 0.7%. Retargeting campaigns perform ten times better than regular displays. It’s an enormous change and – retargeting is cheaper. 

WebFX informs that the average cost for remarketing on Google is $0.66 to $1.23 per click. In comparison, the average cost-per-click (CPC) for search and display ads on Google ranges from $1 to $2 for search ads and less than $1 for display ads. So – save money and get more in the process.

Industry

Another big thing when it comes to Google Ads is the industry. Of course, things like the quality score is important, yes, but if you want to get a big full-page ad on the front page of Google, you will likely have a lot of issues coming your way. Let’s see what kind of factors can influence the industry element of your Google Ads.

• Competition – like with the previous examples, the higher the competition is there in a market, the higher your prices for each click will get.
• Keywords – the more popular keywords you choose, like “shoes” or “games,” the harder it will be for you to get the job done. 
• Target behavior – if you want to succeed in your industry, you need conversions. And conversions cost more. Depending on the industry, it will be higher or lower to get people involved in your business. For example, it’s much more likely that people would buy shoes if they’d see an ad, then – a house.
• Product/Service Value – another big thing that can affect your ad price is the product or service you are promoting; usually, the more expensive the goods or services are, the higher influence CPCs will feel; the focus on luxury gods typically shows in the price, so selling houses will generate a lot more costs, as it’s a much more profitable endeavor;
• Regulations – when creating ads, you also need to evaluate the regulations in the industry, as the pricing may change depending on how strict those are; healthcare and pharmaceutical industries will usually need bigger budgets for more clicks and higher ROI than selling shoes or t-shirts;
• Local vs. Global – the same goes for investing in local or global businesses; everything local will usually cost less than the industries that can be accessed worldwide; competitors from smaller local shops can have an advantage over giant industries, full of problems;

Campaign Type in Google Ads

And finally, the chosen campaign type will greatly impact your advertising models. The particular keyword will influence your average CPC a bit; the campaign type will change it as a whole. Different types of ads will bring different website visitors, and you will look for various search queries. You can get your PPC campaign going even on a small monthly budget. The average customers can be interested in your products, conversions, brand awareness, and anything in between. You will generate noticeable results with various campaigns, so let’s see how those can influence your costs.

• Search Campaigns – the most popular text ads showing up on the Search Engine Results Pages – SERPs. Based on the auction marketplace, bidding on the right keywords can be more or less problematic, as there is a very high cost for some keywords. 
• Display Campaigns – on the other hand, we have the Display Campaigns that can create a sense of urgency for your customers, as the display ads that can produce workable results and bring new customers will follow them everywhere they go.
• Video Campaigns – you can also use video campaigns for your strategy; although it’s not for low-budget campaigns, potential clients are obsessed with videos; for better or worse, people are spending a lot of time on their phones, so it’s only natural that video ads will not get you the same clicks as creating some primary search campaign;

How Much Should I Spend on Google Ads – Conclusion

So, whether you are an actual cleaning company, you’re airing dirty laundry for a magazine, or you’re one of the small businesses that are concerned about their ad position – there is something that will help you in the beautiful world of digital advertising. Not all keywords will get you the same results, but Google Ads is a fantastic tool that can help anyone. Of course, it’s not the cheapest of them all, as you will have a lot of problems in getting the right amount of starting budget to get some cash flow after a few weeks.

Landing pages in the same industry can vary significantly regarding traffic, and your CPC costs will quickly become your CPC conversions. So, whether they like it or not – the marketing is online. And the sooner you’ll transfer there, the sooner you will get results. Using other advertising channels still makes sense, but with digital marketing, you will just get a lot more, with even a small budget. The marketing spend will result in money coming your way sooner or later. You just need to wait!