Figure out your starting budget on Adwords
Google Adwords is not your ordinary channel of advertising. It is built as an auction marketplace, therefore, the amount you should be spending depends on your industry and the popularity of your keywords. Which poses the question: How much should you spend on Adwords? Although planning your PPC budget can be time-consuming and quite challenging, it is essential to plan it well if you wan’t your advertising strategy to be successful and profitable.
When you start with Adwords, you should keep in mind that you’re making an investment. The less you decide to spend, the more limited your opportunities will be. The important thing is to focus on your ROI and not on the cost of your ads. This way you will be testing the actual profitability of your campaigns. Eventually, you will be able to know what keywords are bringing you conversions and also which landing page message is working best for converting clicks into leads and customers.
How should you start?
When it comes to the amount spent on Adwords, there is no set ideology to abide by. It really depends on your business, your goals and your capability. If you are an owner of a small ecommerce business, you might want to start with a smaller budget. However, you should make sure that the amount is high enough to gather enough data. You might also want to avoid limited exposure of your ads to potential customers due to “Limited by budget” alerts.
How does the recommended budget from Google work?
There are two cases in which Google won’t display a recommended budget for your business:
- You don’t usually reach your daily budget spend
- Your campaigns have limited data
When Google does recommend you a budget, then this amount has been estimated in order for your ads to be shown more often for your current set of keywords.
Recommended budgets are based on the following factors:
- Recent campaign performance
- Current campaign budget
- Your keywords
- Campaign targeting settings
Why costs might exceed your average daily budget?
You might have noticed that some days you spend more than your daily budget’s set amount on Adwords. This is happening because Google decides to spend more on days with higher search traffic to improve your performance and increase your ROI. On Google Adwords “Dipping into your daily budget for other days in the month helps to optimize the performance of your campaigns and helps make sure that your ads can run a little more on days when they’re very popular”.
This amount will then be balanced by other days with a lower spend, when your traffic will already be lower than normal. However, you shouldn’t worry about spending too much without planning. Google is going to allocate your budget during the month in such a way that your total amount spent won’t exceed the amount that equals to your daily budget multiplied by the average number of days in a month (30.4).
Source: Google Support
What is a shared budget?
On Adwords, you can use a shared budget for allocating an amount among multiple campaigns. If you don’t have enough time for managing the budget of each campaign individually, then choosing a shared budget will be the perfect solution for you. When you are choosing an amount to be spent across multiple campaigns, Google will adjust the way your money is spent in order to increase your return-on-investment. Read here for tips on how to increase the ROI of your AdWords campaigns.
If at some point you no longer wish to use a shared budget, you can easily go back to an individual campaign budget for full control over how much you’re spending on a specific campaign.
Source: Google Support
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