You Ask, I Answer: What’s a Good Google Ads Budget?

In this episode, Megan asks, what is a good what is a good Google Ads budget? Is 1,000 a month too low for good results? It depends. There's so much that goes into Google Ads that in terms of of budget and quality and ad appearance and stuff, that there's no obvious answer to that question. Now, let's talk about some basics.

For sure, you do have to spend more than like a dollar, right? Um, there are breakpoints in Google Ads, uh there seem to be where uh over certain budget amounts tend to get better results, you know, like a hundred dollars a day, a thousand dollars a day, five thousand dollars a day, uh, twenty thousand dollars a day. And particularly for the the way Google ads work now with a lot of machine learning, the more budget you put in, particularly up front and fast, the faster the algorithm can tune to the results and the target objectives you've you've set. So um there is certainly is something to be said for front loading your budget a little bit so that you can tune the AI faster. But the big things that that determine budget for Google ads is one, how much competition are you facing, right?

If you're advertising something that is high volume in searches but low competition, which is a unicorn, they're very rare, um, you don't have to spend a ton of money. You will get good results from you know 100, 200, 300 bucks a day. Um if you are, on the other hand, competing with, oh, I don't know, Walmart or Amazon on something, you're gonna have to spend more uh going up against the the the heavy hitters. The amount of available inventory matters. Uh, if you are in B2C uh marketing right now, it is November of 2022 as I record this.

Your Google Ads budget has to be much bigger right now. From now until December 27th, 28th, you're gonna be spending. Even if you're not putting up more ads just by virtue of the fact there's so much more demand for ad inventory right now, because everyone's trying to sell for the holidays, your budget's gonna go up. Guess what? You know, um January 3 for if you're sell toys, that's gonna be a pretty easy time to run ads because that you know the holidays are over at that point.

By the way, the holidays are over for people's spending of gift cards, isn't it just keep that in mind? Um, so competition certainly matters. The uh targeting that you're using matters a whole bunch, right? Uh the more refined your targeting, the more specific you are within reason, um, the less you have to spend because you're not trying to reach everybody. You're trying to reach a specific group of people.

Now, there are definitely some audiences in Google Ads where it will say, yeah, there's this is too small to target. We can't we can't target just these 50 people. Um, you have to be a bit more broad than that. But that can influence your budget substantially. And finally, things like quality score matter a whole bunch in Google Ads.

Quality score is the relationship between the search terms that uh that people are looking for, particularly for Google search ads, um, the ad copy and content itself, and the landing page where uh people are being sent. The more aligned those things are, the higher your quality score tends to be. Um, the better quality your landing page is, you know, and the more mobile friendly it is, again, the better your quality score tends to be. And that means that uh in the ad auctions behind the scenes, Google ads will say, Well, though it's not just who's bidding the most, but it's also who's gonna be the most satisfied by the result. And so Google's internal ad bidding algorithm looks at quality score as a function of, you know, where do we send the clicks?

Where do we how do we show uh ads in order? Ads, two ads that are bidding on the same thing, but one has a much higher quality score than the other, may not uh spend as much on budget. Like they may win the auction at a lower cost because Google's algorithm says the user is more likely to go to the site and be satisfied by the experience, and therefore the company will get the business and is more likely to sp continue spending money on Google Ads. So there really is no good answer to this, other than there are minimums. Um what I would recommend is start with a as specific an audience as you can manage, put a lot of time into the landing page, put a lot of time into the ad copy and the ad creative, and then start spending some and seeing what kind of results you get.

Um do a little bit of testing and stuff in the in the beginning, the more you can spend up front, ideally, you know, in the first three to four weeks to get the particularly if you're using the new bidding strategies, the newer bidding strategies, the faster those will tune and uh in the machine learning model and and start delivering better results, and then you can throttle your budget up or down from there. But give yourself I mean again, it it depends. Uh if you're spending a thousand bucks a month, you're probably gonna be tuning your ads in about 30 days, give or take. You're spending uh like a hundred thousand dollars a month, you're gonna those ads are gonna tune within a couple of days because uh you're just sending that much traffic through um the system and the machine learning model can tune that much faster. So the more you spend, particularly up front, the faster your your ads tune because you're just gonna send more traffic to them.

So yeah, there's there's no good answer. Uh it's like, you know, how much should I eat? And uh I don't know, it depends on your health and how hungry you are and what's available, and you know, and things like that. So uh it's a tough question to answer. But thanks for asking.

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