What Should My Google Ads (AdWords) Monthly Budget Be?

 

AdWords monthly budget Setting is one of the challenges new advertisers face. It can be hard to know what to spend and what you’re likely to get back from that.

 

Like many advertisers you may have heard of how expensive Google Ads is. In fact, you’ve probably run some campaigns in the past and spent a few hundreds with little return.

 

That’s not surprising and is common for many new advertisers. However, Google AdWords works and it’s a platform that many advertisers are reaping huge benefits from.

 

The mistake that many advertisers make though is that they set a low monthly budget and never see any return. It’s important that you setup a good AdWords campaign and assign an ideal budget. So I’ll try in this article to describe how you can do that.

 

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Check out the following tips to help you decide your AdWords monthly budget:

 

Conduct Keyword Research

Keyword research is fundamental to budget Setting. It’s one of the first actions you should conduct and it should be thorough enough to help you understand what budget to set.

 

Keyword research will help you decide what bids to set or bid strategy to use. You’ll be able to see how competitive your keywords are and you’ll know whether competition is low, medium or high for each keyword.

 

Conduct Competitor Research

Check out how much your competitors are spending. There are tools like the SE Ranking Competitor Tool that reveal your competitors average monthly spend. And you can also see what ads they have and keywords they are bidding on and their rankings.

 

Your competitors spend will help you decide on what AdWords budget to set to be competitive.

 

What positions do you want to achieve?

There are two main positions in the Ad auction results page: top and bottom. Top ads occupy one of the top 4 positions and bottom ads occupy one of the three positions below the Organic results.

 

If you want a top spot, you’ll normally have to pay more. So you’ll need a bigger budget especially if it’s for all your keywords.

 

Your competitors will also be bidding for these top spots and will be using one of the competitive bid strategies to do so.

 

The bid simulator tool will notify you what budget to set for more clicks for your current position. You can choose to accept one of the recommendations and increase your budgets.

 

What campaign type are you launching?

The type of campaign you want to launch determines the budget you allocate. Some campaign types like search campaigns tend to have higher Cost Per Clicks (CPCs). So you’ll need to allocate a higher budget to get a decent volume of clicks.

 

For display campaigns, CPCs are usually much lower than Search CPCs.

 

How many campaigns you want to launch

Budgets are set at the campaign level. So each campaign you launch will have its own budget and that will determine how many visitors you get for each campaign.

 

However you can launch multiple campaigns and assign one account budget to all of them in the Shared Library section. This helps you to easily manage your budgets and control how much you’ll spend.

 

Having a separate budget per campaign on the other hand makes managing budgets much more difficult.

 

Is it a test campaign or full campaign?

For a test campaign you can start with a small budget. Many advertisers start with budgets as low as £200 per month to test performance and then increase as they optimise and improve return on investment (ROI).

 

However, a test campaign should run for a limited period. And when you see the campaign working, you should increase the budget quickly to take advantage of the opportunity.

 

Conclusion 

Your AdWords monthly budget will determine how effective your campaigns are. The budget you set will depend on factors such as your goals, the type of campaign you are launching, keyword research and what you want to spend daily and other factors.