Managing Your Google Ad Budget
Throughout our series of articles on Google Search ads we have made reference to your ad budget. In this article, we’ll take a look at how to prepare and manage that budget to make every cent go as far as possible. When every single click on your ad comes with a cost, knowing where your money is going is key.
In this article, we’ll take you through how to build an ad budget from the ground up, in three main steps.
Determine the initial budget amount
Assign spend to multiple campaign types
Execute new/different campaigns.
Determine the initial ad budget amount
Once you’ve decided to execute a Google Ad campaign, the first step is to figure out how much you want to spend and over what period of time. Note that you can set monthly spend limits on Google Ads to help manage the costs. Before you can do that, consider the following questions:
Where does this campaign fit into my overall marketing strategy?
How much (and where) are my competitors advertising?
How much are the costs per click (CPC’s) for the keywords I am considering (see our previous article on Keyword selection)?
Which metrics are the most important for my business in relation to this campaign?
Where does this campaign fit?
Having a good understanding of where your organic traffic comes from is helpful when it comes to planning a new campaign. Determining whether you are trying to build awareness, generate leads or jump start sales of a new product is also key to designing a great campaign.
If you are already advertising through other channels, make sure you’re clear on how your Google ads will fit with those messages. At a minimum, list out each existing channel and be clear as to whether the Google Ads will support or replace these efforts.
Where are my competitors spending?
If you Google your business, you may well see a list of your competitors on the same search results screen. Using a tool like Google’s Keyword Planner, you can get an idea of where your competitors are spending their ad budgets. You can also look for cheaper, more effective keywords to help drive your campaign (again, see our recent article on generating keyword lists).
What do I need to pay for the Keywords?
The basic calculation of your ad budget comes from the cost of the keywords that you are bidding on. It’s not the be all and end all of budgeting but it's a useful starting point. Remember, you are looking for keywords that have high volume traffic but low competition in terms of bids. Use the Keyword Planner tool to review the list and access the data relating to volume and costs.
What Metrics Are Important?
For some businesses, cost per acquisition is important. For others, conversions are the most important data point. Whatever it is for your business, make sure it is clearly defined and you are able to track it as part of the campaign.
Now that you’ve reviewed the four questions laid out above, take a look at your findings. Consider the metrics that are important to you and the number of leads or sales that you are trying to generate from Google Ads. Then, review the costs of the keywords that you’re likely to bid on.
Assign Spend To Multiple Campaigns
In general, your Google Ads Search campaign is going to fall into one of the following categories.
Research / top of the funnel
Branded
Competitor
High Intent
Top Performers
Most of your budget should be directed towards your top performing keywords but what should you do with the rest?
Research / Top of the funnel
When you start out with Google Search Ads, the temptation is to focus on what are known as top of the funnel keywords. For example, a coffee shop owner might be tempted to bid on the keyword “coffee shop”. However, generic (or top of the funnel) keywords like this are in high demand and therefore cost more.
For example, it’s possible to pay over $100 per click for generic search keywords like “lawyer” or “attorney”. That’s not to say that all generic keywords are this expensive but it pays to be careful in what you select.
It’s better to review the intent in keywords. For example, it might be better to bid on “hire a lawyer now” which implies intent to take action quickly.
These types of campaigns have their place but use them wisely and be conscious of the costs that may be associated with them.
Branded Keywords.
When you search for your company name on Google, what do you see? If you see your competitors above your link with sponsored ads, that means that they have bid on your brand name.
Now, your competitors will have to pay a premium for these branded keywords. However, you can bid on your own brand keywords at much more favourable rates. Bidding on branded keywords is not a must for every campaign but it’s wise to pay attention to where your competitors are placing their ad spend.
Competitor Keywords
These keywords are covered by the section above but in this case, you are bidding on the brand names of your competitors. Do you think you have better service or better prices than Colin’s Carpets across the road? Bidding on “Colin’s Carpets” as a keyword in your next campaign will make sure that your ad shows up when people search for your competition.
Remember, these branded keywords will be more expensive when you’re bidding on them. Therefore, make sure you’re using them in the right way. Target your true competitors where you feel you have a specific advantage. Otherwise you will be spending money on clicks that just are not going to convert for you.
High Intent
While top of the funnel keywords can be expensive, high intent keywords can be just the solution to the high volume, reasonable cost conundrum. These keywords come in two categories, ‘buy now’ and ‘product’.
‘Buy now’ keywords are those that suggest that the person conducting the search is ready to buy the product or service. Normally, ‘buy now’ type keywords are a combination of top of the funnel terms plus words like ‘buy’, ‘discount’, ‘deal’, ‘coupon’ or ‘free shipping’. The cost of these high intent keywords can be a fraction of the cost of the top of the funnel alternatives.
Product (or service) keywords might include a search for your specific brand, the specific product name, product category plus qualifiers such as ‘affordable’, ‘best value’, ‘top’, or ‘review’.
Remember to analyse the data for the keywords that you are selecting and run a/b tests to ensure that you are maximising your spend (see our previous article on that topic).
Top Performers
Once your campaign has been running for around 30 days, you’ll have a much better sense of how your keyword selection is performing. Take a look at those keywords that consistently display your ad (good volume) but never seem to get clicked (poor click through). There may be an issue with the ad text or ad extensions (more on these later). Once you’ve made changes and If you’re still not getting traction after a couple of weeks, it’s time to replace them with alternatives.
Over time, you can focus on your top performing keywords and split them out into their own campaign. This way, you don’t need to spend money on keywords that are not delivering for our business.
Budget Allocation
So how do you split your ad funds across these categories? While there are no hard and fast rules on precise allocations, it makes sense to spend the majority of your budget on your top performer keywords.
High intent keywords should also take a significant portion of the budget given their value and chance to convert. The remainder of the budget should be split across research, branded and competitor keywords depending very much on the lay of the land for your business. If you’re in a very niche business with low competition, budget allocation for that category could be much lower.
Execute new/different campaigns
Remember, Google search ads are only one type of ad campaign that you can run. Others include:
Display ads - ads that show on other websites.
Remarketing - reaching out to contacts that previously visited your site
While these types of campaigns are beyond the scope of this series of articles, we will be visiting these topics at a later date so please check our website regularly for updates.
Summary
We covered a lot of ground here on a topic that is central to your Google Search ad campaign. However, understanding how much to spend and how to spread that amount across the campaign is key to getting the most from Google Search ads.
A properly funded campaign takes some time to set up, manage and analyse but it’s vital if you want to maximise your ad spend. Not all businesses have the time and resources to manage all the moving parts of a Google Search Ad campaign. However, they can be very effective when it comes to driving awareness, generating new leads and increasing revenue.
Kennedy Wood Marketing can help you design, develop and implement a campaign for your business. This includes a detailed discussion on the objectives for your campaign, the best keywords to focus on for your business and a review of the campaign performance.
If you are interested in running a Google Search Ad campaign for your business but you're not sure how to get started, please reach out to us here.