How to calculate your Adwords Budget
A big mistake is to jump into your Google Adwords campaign without working out if it’s a good idea or not. Ultimately, are you going to make more money than you invest? Your investment is your monthly Google budget.
Every time a person clicks on your ad your budget will be reduced by the maximum value you have set to bid for that ad (or less depending on the algorithm). If your maximum is too low then you will be out bid too often to get enough clicks to convert any leads. The same applies if your monthly budget is too low.
The conversion from traffic to leads and sales depends on the design and information on your website and your ability to convert to a sale once they contact you. A redesign may be needed before launching an Adwords or SEO campaign.
Let’s start with a ball park figure of 20% of your target monthly revenue. Now, check if this monthly revenue is actually possible. Can you supply this much per month? Now check your monthly Google credit budget again by answering the following questions.
Steps to calculating your campaign budget
- How much is the average cost per click (CPC)?
- How many clicks do you want to aim for per day?
- Multiply your number of clicks by 30 days to get your monthly budget.
- How much is your average sale / service worth?
- Is your monthly sales forecast higher than the cost of the Google budget?
- What is a realistic monthly sale target for your industry? Is that total higher than your Google budget?
- Is your estimated Google budget in line with the 20% of your revenue goal?
We hope this helps you make a better decision when planning out your campaign. If you need further help with your Adwords management call us today on 02 99073136