Beginners Guide for an AdWords Budget

Beginners Guide for an AdWords Budget

Initial Thoughts

How much are you really willing to spend on AdWords marketing? Is this money you have saved for the past year and can only afford to try it out for 3 months? Do you have enough money to invest in online marketing for more than 6 months without any problem? Are you completely unsure of how much to invest?

If you are asking these questions, then this information is for you.

We have run into several business that say they can only try this for 3 months, and if they see no results, they are out! What some people do not understand is AdWords is not going to make you rich by the next morning..(if you do become rich by the next morning, please let me know and I will update this post).

AdWords involves targeting the right audience, capturing data, and utilizing the data to optimize an effective way that is going to give you ROI. Are results guaranteed? No they are not. Are you going to get leads? More than likely, yes you are. Do we know when you will achieve a profit from the campaign? No, we do not and anyone that tells you otherwise is lying to you. Online trends change every year, and just because you were profitable last year does not mean the same strategy will make you profitable this year. With the rise in social media, many businesses are turning to Facebook, Instagram, and YouTube to reach their desired audience. This means that business owners must increase their online marketing channels in order to keep up with the competition.


First, you have to be aware of the competition in your industry. Are you a niche business, or are you the next lawyer or plumber excited to dive into the AdWords battle royal?

Niche businesses have the advantage of enjoying a low cost per click (cpc) and starting off with a smaller budget.

Competitive businesses need to understand that to get sufficient data through AdWords, we need to test effective budgets that will capture enough traffic to make informed decisions through the account.

One important note is expectations, and you will see me reference this later on in the post. Expectations are different for each business owner, and this will also help determine the right budget. No business owner should expect to make a profit within the first month. If you dive into AdWords with this expectation, more than likely you will end up frustrated and disappointed at the end of the month.

Experimental Budget

Rule of thumb is to get at least 10 clicks per day. In a month, that is 200 clicks if you advertise M-F and 300 clicks if you advertise over 30 calendar days. Anything below 200 clicks is still fine, however, do not go below 100, because you are limiting yourself to the amount of data the campaign can receive and not allowing yourself to reach your goal in an efficient time frame.

A couple of ways to decide on a budget is to use the keyword planner by Google. Here you can plug in a website or keywords and Google will give you a suggested bid. Also, you can be very specific to the target location and language that you wish to have.

As you can see, anything with lawyers is expensive because of the competition.

Other businesses, depending on location, can be much less competitive. See the example for Shoe Repairs below.

Let’s use the example for Shoe Repairs. Remember that the “suggested bids” are only an estimate of what you may actually pay. AdWords also takes into consideration the quality score to determine how high orlow of a bid you may have. Quality scores that are 6/10 and above generally pay less than keywords with a quality score of 5/10 and below. You may be asking yourself, “what makes a good quality score?” Google determines your quality score based on three different factors, which are: expected clickthrough rate, ad relevance, and landing page experience. These are the basic principles that go into a robust algorithm to determine how relevant your keywords are to your ads. This topic can serve as a blog post on its own since there are many things to cover.

For now, to keep it simple, let’s use the highest suggest bid as a benchmark. So if each keyword bid is $1.15 and we want a minimum of 10 clicks per day, we need a daily budget of $11.50 or we can use $12 to leave it even. This gives us a monthly budget of $240 if we advertise only Monday through Friday. If we want to advertise the full month, then we need a monthly budget of $364 because we multiply the daily budget by the average number of days in a month which is 30.4.

Expectations / Conclusion

You are now ready to establish your first monthly budget.

Keep in mind that depending on the business, you may run into seasonalities that affect the traffic to your website. My biggest piece of advice for this post is this; before you decide to try out AdWords, make sure you have the right expectations for your business before you begin. A small hint at what you should expect from month one is making sure the campaign is getting the right amount of traffic. As I mentioned earlier, do not go into month one believing you will make an ROI from the campaign. While this can be true in specific cases, it is definitely not something you should expect.

Now that you have finished reading, ask yourself these questions. What is my expectation for month one, and is this realistic? Do I have the required investment that will accomplish my goals?

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