Our Tips for Estimating Google Ad Spend

So you’ve decided that it’s time to start running ads for your organization. The only problem? You have no idea how much it’s going to cost for your ads to be successful.

How much should you spend on Google Ads?

When I tell you we get this question all the time, I mean all. The. Time.

And it makes sense. When clients ask for a proposal, they need to know how much money they'll need to dish out to see results. 

Unfortunately for us, it’s not an easy question to answer. But it is something that we want to be more transparent about. Hence, this blog post. 

To estimate either a total budget or a monthly budget, you must consider many factors.

Google operates on an auction marketplace. Meaning, Google varies its bid on keywords depending on the time of day, search volume, audience and more. 

What is the campaign goal?

When a client asks how much to budget for Google Ads, the first thing we need to know is the campaign's purpose. 

Campaigns are measured differently depending on the goal. If the goal is to increase brand awareness, Google will charge for each click. In general, awareness-focused campaigns will reach a larger audience. For a conversion-focused campaign, Google charges per conversion. Conversions cost more than impressions or clicks.

When we know the goal, we'll conduct competitive research to determine what competitors in the industry are spending to advertise in the space.

We also use tools to gauge a reasonable cost-per-click and implement this into our budget proposal. The business services vertical, including legal, accounting, and real estate, is among the most competitive in Google Ads. This means higher costs-per-click (CPCs). This is because a new client in this industry could yield anywhere from $1,000 to $10,000 and more. So, a $50.00 CPC is a small price to pay.

Luckily, once we have a good idea of an estimated cost-per-click (or cost-per-conversion), it’s easier to estimate the result. Say the average CPC is $5.00, and the client determines they can spend $2,000.00 monthly. Then, we could estimate 400 website visits per month. 

You can also use the estimated website visits to estimate conversions. Knowing your website’s average conversion rate, say 10% of visitors, you can figure that you'll receive 40 conversions per $2,000.00.

How long will the campaign run?

Next, we need to know how long the campaign will run.

Some of our clients run campaigns for specific events. Others want to gain more site traffic or leads over time.

Shorter campaigns will need higher budgets upfront. New campaigns haven't built up any traction and clients often want to see results in a short time.

Ongoing, long-term campaigns will build traction over time. These can run on lower budgets. When possible, we suggest creating campaigns without end-dates, as this will give Google time to learn the campaign and audience.

Who is your target audience?

Next, we’ll need to know who you want to reach with your campaign. Targeting users by location will cost less than more detailed targeting, such as targeting by job title or interests. 

How do we *possibly* estimate Google Ads spend?

It’s hard, we know. And we don’t always get it right.

Of course, there are ways to conserve the budget of a more expensive campaign. We always look into this to make sure that clients aren’t spending any unnecessary budget. For example, we can set up advanced scheduling to show ads only during the most popular times of the day. 

Need help managing your Google Ads or just want an expert’s help in setting an ads budget? Contact the ArcStone marketing team today.