How to set AdWords budget: How Much Money You Should Pour In?

Jan 19, 2018 — SEO

Google AdWords is one of the most popular online advertising platforms. Its pay per click (PPC) feature has attracted a lot of marketers as they need to pay only when someone clicks on those ads. If you are thinking about launching an AdWords campaign for your organization, the budget depends on how much marketing budget you have been allocated and the average value of each sale. For example, a bike selling company’s budget will be different than a clothing company. So, every company has a different budget. Branding and digital marketing companies can guide you set the budget and run an overall campaign. Following steps will guide you to determine how much money you should pour in your AdWords campaign.

Take help of Google’s keyword planner:

The first step to launch a campaign on AdWords is to determine which keywords will be targeted and how much you are willing to pay for every click. Using Google’s keywords planner will help you in determining which keywords to target. It also provides insights on additional keywords that are needed to consider. Along with this information, it offers insights on how many users search for every keyword each month and how many other advertisers are competing to advertise those keywords. Begin your campaign when you thoroughly research and select AdWords to be targeted.

Conduct test campaign:

Before launching a campaign, you need to conduct test campaigns. You may lose money on these campaigns, but you can view this money as an investment and earn money after launching a tested and optimized campaign. The first step to conduct test campaigns is to select keywords to be targeted. The insights from Google’s keyword planner will offer valuable insights. If it is your first campaign, conduct tests on a small number of keywords. Once you select keywords, determine how much you are willing to pay for each click.

Google offers basic guidelines for setting bids, you can stay close to those bids or you can realistically set a budget for each click. Then set a test budget. Though there is no guarantee that these test campaigns will be profitable, you can always earn that money back with an optimized strategy. You need at least 100 clicks to know whether the ad campaign is converting well for your organization. However, if you see no conversion, stop the campaign as soon as possible.

Use optimized strategy for campaigns:

Once test results are in, you can use the wealth of information to devise an optimized strategy to create efficient campaigns. The more experience you gain with AdWords, you can use that information to optimize campaigns and gain maximum returns. Click-Through Rate (CTR) will tell you a comparison between how many viewed the ad and how many clicked. This will show you which keywords had high bids and maximum clicks. You will get an idea on which bids and keywords should be used to continue the campaign.

The next step is to determine the cost per conversion. If you are spending money on ad campaigns, you need to determine whether those clicks are helping in generating the revenue. Moreover, you need to keep track of average cost per conversion. If average cost per conversion is $5 and average sale is $25, then you are earning a significant return on investment. This implies that you need to keep average cost per conversion lower than average sales. In addition, you need to keep a close eye if the CTR is high and conversion is low. If this is the case, you need to find reasons and reconsider campaign strategy.

Another step needs to be considered is to add negative keywords. These keywords are added based on non-converting traffic received for test ads. Moreover, they prevent your ad from showing up in search results for keywords that do not convert.

Allocate AdWords budget based on overall optimized strategy:

Once you conducted test campaigns, utilized optimized strategy, and selected keywords, set your budget based on how much revenue you plan to gain from AdWords. Determine return on investment on each of your strategies and allocate large budgets to channels that gave the highest returns. Moreover, if you have a room in your overall marketing budget, it is a good idea to spend it on Adwords to get maximum returns and increase overall revenue.

Kaizen Design Studio is one of the leading branding agencies in Pune and instrumental in helping clients gain customers online. It can help you in setting AdWords budget and achieve high conversion rates.