A short guide to setting your Google Ads budget

However big your business and however much online experience you have, the budget is always a hard call. More often than not, you make it alone, and it’s where many advertising plans get stuck.

The good news: however personal the decision, there are a few reference points that help you get off to a good start in Google Ads.

1. What you can afford

What amount can you put into Google Ads month after month, for as long as possible (ideally up to 12 months)? That’s your starting budget. You’ll adjust it along the way, once the campaigns give you data about the market and your customers.

To set it, think about where Google Ads sits among your marketing channels. It isn’t a cheap channel, but it can be more efficient than all the others and can become your main source of online sales.

2. Cost per click

This is the strongest argument when setting a budget, but it shouldn’t be the only one. It’s a good start, not the answer to every question.

The average cost per click for your most important keywords lets you estimate how much traffic you’ll bring to your site.

The Keyword Planner in Google Ads helps you estimate that cost, based on your industry, your location, and how often people search for your products or services.

3. The metrics that matter for your business

Every performance metric matters, but the nature of your business makes some more important than others.

If you offer emergency services, for example, showing at the top of the page (your top impression share) may matter most.

If you run an online store that simply wants to sell, cost per conversion will interest you more than anything else.

Sometimes you’ll want as many impressions as possible (when you’re new to the market and need to be seen). Other times, a better click-through rate.

Once you know which metrics matter to you, you can set the budget much more precisely.

How Google spends your budget

In Google Ads, you set an average daily budget per campaign. On days with more searches, a campaign can spend up to twice that amount, but over a calendar month you won’t be charged more than about 30.4 times the daily budget (the average number of days in a month). So think in monthly terms: the daily figure is an average, not a hard cap for each day.

In short

There’s no magic formula. There are, however, variables you can use to put together a budget: what you can afford, where Google Ads sits among your channels, the cost per click in your industry, and the metrics that matter for your business.

And once you’ve found the right formula, you can spend as much as you like, as long as the campaigns stay profitable.