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This is one of the most common questions people ask when creating a Google Ads account. Unfortunately, there is no universal mathematical formula to set it. However, there are a series of indicators that can help you determine the optimal budget for your business.
The investment you should make in Google Ads depends on several key factors, such as your business goals, the cost per click (CPC) in your industry, competition, and the budget you have available. Here are some steps to help you determine how much to invest:
If you know your historical CPA, use it as a reference. If not, consider how much you are willing to pay for each new customer based on your business's average ticket price:
Example: If you aim to spend $20 per conversion and want 100 conversions per month, the ideal monthly budget would be $2,000.
Depending on the industry you work in, certain sectors like insurance or higher education have very high CPCs.
It also heavily depends on the market where you are advertising. Countries like the United States or the United Kingdom are particularly expensive, whereas Latin America tends to have cheaper CPCs.
If you have a limited budget, it might be a good option to target niche keywords, which are less competitive and have a lower CPC.
Begin with a modest budget and adjust it periodically based on performance results.
Remember, the more optimized your account, the lower your CPC will be.
While this can give you an idea, Google always recommends increasing the budget (remember, their goal is for you to spend more). Always evaluate whether increasing your investment truly benefits you.
Frequently review KPIs such as CPC (cost per click) and CPA (cost per acquisition) and adjust the budget accordingly.
Dolnai’s tool can help you adjust your budget and allocate it to the keywords that bring you the most profit.
