The "reasonable" Google Ads budget?

When it comes down to running marketing campaigns for your business it usually takes two questions in considiration:

"What budget should I provide per day or month for marketing campaigns?

"What is the maximum amount that should be spend before dropping campaigns?"

These questions makes sense if your business is just beginning with ad activities in Google.

Finding the right budget with Google Ads or in general in the area of ​​PPC ("Pay per Click") is easier than you may think. However, for those who has trapped themselves in the world of fixed sizes and fixed prices still has a hard time adjusting.

In fact, if you only advertise because of brand awareness or simply to generate clicks (traffic), a "sweet-spot budget" determination is near to impossible.

The Basic rule

Marketing budget must be measured strictly according to the ROI (Return on Investment) principle. 

As a rule, the Return on Advertising Spend (ROAS) is called and corresponds to the return on investment (ROI) for Google Ads, as well as any other PPC measure. In a clear, but simple terminology, this means: If your online marketing activities are going as well as they can, then the budget should be determined solely by the ROI.

Simply putting € 100 into a two-week campaign (that's around € 7 a day) And then assuming or making it known that the campaign was a huge mistake is dubious, as opposed to € 1,000 in a 4-week campaign (that's just under € 33 a day) could lead to a sensational success. 

The only time when the statement "can perform" is in the game is the time when a PPC measure is completely restarted and therefore there is no reliable data that can be used for the calculation and decision-making. In this phase, you could consider the budget invested as lost or lost, since you cannot be sure whether profitability will still occur.

The "Magic" behind

Success with Google Ads as well as other PPC measures depends on how many “shares in the search market” can be achieved in a defined environment. This is usually referred to as the “share of search impression ”. And then of course how many of the search impressions you can convert into - clicks and then into - leads and - sales and thus - profit.

The budget should initially be at least so high that you can also get statistical data for optimization and it should be so high that you can live with the fact that a part of the budget is spent on tests at the beginning (we can call it as “training fee”). If the starting budget allows, try to make sure that the ads always appear. The best starting point for this overall situation is optimization.

Change thinking patterns for the right budget on Google Ads

Imagine a large parking lot. We'll say there are 1,000 cars. Now you put a flyer under 20 windshield wipers of the cars. And you only do this once. Now imagine you put 800 flyers under the windshield wipers and you repeat this 10 times a day. Which analysis afterwards is more meaningful? 

This is also a reason why the media budget should be higher at the start of a campaign than later!

This rule applies, unless your offer is not affected by a physical limitation (e.g. for a hotel - you no longer have any rooms available or the occupancy is already 98% and any further acquisition is no longer profitable) or the click price increases so that the sequence the principle applies: the budget can be set to an unlimited high. However, this also requires extensive tracking.

Apart from an incorrectly calculated media budget, there is still a lot you can do wrong with Google Ads. 

And if you get many leads via "virtual values" ( e.g. leads), but are still do not make profit, then also check your internal processes. It is very possible that the fault is not in the ads but your internal sales processes.