In order for your business to grow, you need people to find you online. Since 2016, Google has placed Google ads at the top of the search results page. When your business is featured in this prominent, valuable position, it can get you substantially more clicks than results that appear farther down the page.
You want more clicks, more traffic and more revenue, but with Google Ads, there’s a huge amount of uncertainty because it’s basically an auction system. So how do you come up with a Google Ads budget that gets you the results you’re looking for?
Our Google Ads budget calculator (below) can give you a realistic estimate of how far you can expect your monthly spend to go. But before you invest, it’s helpful to get an idea of the process that impacts Google Ads pricing.
How Do Google Ads Work?
You and Google both actually have similar goals. You want to connect with your ideal customer, the person searching for you online at the exact moment they’re interested, and to make money. You can do that both through organic (free) and paid (Google Ads) methods. Excellent content, strong on-page SEO and other factors get you in front of the right audience over time, but using Google Ads accelerates your results.
Understanding Google Adwords Pricing
When you reach for your smartphone or open a search window, that action usually starts with a desire to know or obtain something. Your customers are the same way. Google Ads, previously known as Google Adwords works when you identify terms your audience is most likely to search for when they want what you do or sell, then you pay more than your competition to have your ad displayed when people search using those terms.
You enter a bid for those keywords and create an ad that links to a landing page on your website. Google looks at the amount you bid and how relevant your ad is to what the user is searching for. The search engine also compares that to what other advertisers bid and the relevance of their ad.
If your bid plus your ad relevance is higher than your competitors, Google Adwords displays your ad at or near the top. When people click on the ad and go to your landing page, you pay up to your maximum bid. You only pay each time you get traffic, but you can see why there’s so much potential uncertainty. If you don’t know when you’ll appear or how many people will click, it’s tough to plan how much to spend on Google Adwords. That’s where our Google Ads Budget Estimator comes in, but we’ll get to that in a minute.
Using Google Ads Keyword Planner
For a successful campaign, you need to know what keywords to use. There are a lot of research tools available, but when you’re using Google to advertise, it makes sense to start with the one they created. Google Ads Keyword Planner provides keyword research tools, historical statistics and traffic forecasts.
You need a Google Ads account to get started. Once you have one, you tell Google what words or phrases you want to show up for. The tool lets you find keywords based on your products and services or generated from your website or webpage URL. Then you can refine the people to whom you want Google to show your ad based on their location, the time of day they’re searching, the type of device they’re using and so on. Based on your campaign, Google gives you an estimated performance.
Google Ads Budget and Cost-Per-Click
Cost per click is the amount you pay when someone clicks one of your ads. Google Ads Keyword Planner gives you an estimate of what you can expect to pay, but sometimes you’re charged less. You set your max, and pay up to that amount, only when someone sees your ad and responds.
That cost depends on your industry. If you’re in high competition industries like insurance, finance or law, expect to pay more for keywords related to what you offer. Some costs also fluctuate seasonally. For example, “pumpkin spice latte” will cost you much more in November than it will in June.
However, it’s not always true that the business with the biggest budget wins. The more specific your keyword, the less competition you’ll typically face. The relevance of your linked landing page is also hugely important. If you have a great ad and a high budget but your page doesn’t get visitors the rest of the way to conversion, your ad won’t bring you money. But if it engages your audience and encourages them to spend, what you pay for each click is an investment that brings revenue.
Setting Your Google Adwords Budget
Google Ads Keyword Planner is a great tool, but if you tried to use it and felt frustrated and overwhelmed, you’re not alone. There are a lot of variables, and it can be hard to know where to focus. These are the most important factors when you’re setting your Google Adwords budget.
- Keywords — The broader the keyword, the more expensive it will be. For example, you’ll pay more for “dentist” than “Tyler Texas periodontist.”
- Google Ads time frame — The longer your ad runs, the more you can expect to pay.
- Your average sales cycle — When calculating your Google Ads budget, look at how long it takes after a user first encounters your business to when they make a purchase and what steps have to take place in between. That affects your time frame and revenue.
When you just want to know a realistic budget and what you can expect to make, you may not want to deal with learning to use Keyword Planner. We’ve come up with a tool that’s easier to use and gives you that information in just a few clicks.
Using a Google Ads Budget Calculator to Forecast Results
Google estimates for every $1 that businesses spend on Google Ads, they receive $8 in profit. But for most businesses, that means committing thousands a month for the duration of the campaign. So how can you feel good about the amount you’re about to set aside for your Google Ads budget?
Our Google Ads budget calculator helps you make sense of all the variables and forecast how much money your business could receive based on current data. Get realistic Google Ads pricing with a live calculator that shows how many clicks and leads you can expect from your spend. You’ll also be able to see expected revenue, profit and overall return on investment. Use our tool now to find out how much your ad could generate.
When you need hassle-free Google Ads creation that grows your business, we’re here to help. Schedule a consultation online and we’ll get in touch.
Free Google Ads Calculator Tool
Projected Monthly BudgetHow much do you spend a month on digital ads?
If you don't spend on ads now, just test out a number, 10% of your total marketing budget is a good place to start. Once you've entered all other metrics, come back to budget to see how it affects profit.
Expected CPCHow much are you willing to pay for a click?
Depending on the ad network and audience, B2B marketers can expect cost-per-click to range from $1-$7 or more. You can use the Google KeyWord Planner for help estimating your CPC for search ads.
Target Conversion RateHow often does a visitor convert into a lead on your website?
For the average for B2B marketers it's around 2.6%. Check out these 10 Tips to improve your conversion rate (CVR).
Average Sale PriceOn average, how valuable is a single customer?
For many companies this number may vary or increase over time. Test different options, such as a new customer vs. the lifetime value of a customer.
Lead to Customer RateWhat percentage of your leads turn into Customers?
This is crtical to monitor. Talk to sales and make sure the leads you deliver are top notch. Increasing lead to customer rate can drastically improve the ROI of your ads 10 Tips to align sales and marketing.