How to Spend the “Right” Budget with Adwords

I’ve seen many Adwords campaigns where budgets spent have gone out of control and accounts where they weren’t spending enough. There is no right formula shall we say but there are a few factors which I feel can help you build a framework to come up with the right budget that is suitable and will help manage your expectations. When I speak to new Adwords client, the number 1 thing they always say is:

How much does Adwords cost?

I then reply with a “it depends“, which I hate saying because I wish I could just give a figure like you would get when buying a normal retail product. There are so many factors and its important to understand what those factors are before you can find the budget. Unlike other providers, we would rather give the “true cost” even if you couldn’t afford it and not work with us, than take you on and not make it work. It’s all about transparency but information needs to be gathered so a decision can be made. Let’s keep the word “budget” simple because when it works, you will not think “monthly budget”, you’ll be thinking, “where can I find more $ to fuel this”. Here are the factors you need to consider for your business to decide a “monthly” budget:

1. CPC

Cost Per Click. You need to know how much it costs for each click in Google because each click is going to cost you money. Let me tell you, it’s VERY easy to spend money on Adwords, so be ready to “try things out”. You’re going to need to do keyword research and the tool you’re going to use to get your benchmark for each click is from the horses mouth, Google Keyword Planner. You’ll need to sign up to an Adwords account to get the full functionality of it. Once you know your cost per click then you can start multiplying the amount of clicks you need to test phase 1.

2. Clicks

You’re going to need to send about 100-200 clicks to your site / page for the 1st phase of the test. This amount of clicks is usually enough to start analysing what is going to work in terms of keywords. Sending clicks in its hundreds averages out any potential blips to gain “accurate data”. Once you know the CPC, you can then multiply that initially by 100 or 200 clicks. So if we’re testing 200 clicks with a CPC of $1 then that will be a $200 test budget for phase 1.

3. Volume

If phase 1 test is about 200 clicks then a full test phase click campaign should run to about 600 clicks in total. If each click was $1 then 600 clicks is $600. If you’re account is set up correctly from the get go, you will be testing 600 clicks efficiently which would make the campaign fair and structured.

To keep things simple, all you need to know when it comes to how much you’re going to invest in your marketing is the cost per click (CPC) and how many clicks you’re going to need to get in volume in order to test your market fairly. You can then do your maths later to see what ROI you get.

IMPORTANT – If there’s one thing you’re going to take away from reading this page, its this: To test your campaign fairly, you WILL need to setup the account settings, keywords, ads text etc in the RIGHT way or you will end up testing a campaign on poor foundations. It will be like building a house on quicksand. I can’t tell you the amount of business owners that I’ve spoken to that tried Google Adwords for a bit and then gave up when it didn’t work. With further digging, I find out the accounts are poorly setup, they didn’t spend enough, expected results immediately etc, perfect reasons why they gave up. Saying that, you will see certain companies day in day out advertise on Google. They made it work, and it can happen for you as well with the right setup, right help, right expectations, right resources, right website / offer etc. If you need help with this, get in touch.

If you’ve found this useful, you might find my 7 Page Adwords Setup Guide useful and will help you avoid the problems above and save money. Sign up for the Guide. If you have any questions, you can contact me here: michael@clickmetrics.co.uk

Michael Nguyen

Michael Nguyen

Founder at Click Metrics
Michael Nguyen was a late blooming entreprenuer at the age of 20 and has been in digital marketing since 2009. In 2012 he decided to setup on his own and started working with customers directly to help them win online. Michael believes that marketing has to be 100% accountable, transparent and has been producing exceptional results with PPC. Check out my 7 Page Adwords Setup Guide
Michael Nguyen

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