Best Budget for Google Ads. Best Practice Guide To Allocating PPC Spend

December 15th, 2020

When it comes to starting a paid search campaign on Google; where do you start and how much is the right amount to spend? What is the best budget for Google Ads? Particularly when the median wasted ad spend for an individual account on Google is 75.80%.

With Google’s various ad platforms, all serving different purposes, it can be even more difficult to pinpoint the right platform and golden amount to maximise ROI.

In this post, we’ll be talking about some best practices on how to get the most out of your paid media budget in order to maximise your return.

The Best Practices For Google Ads Budget Allocation

To find out what the best budget for Google Ads is in your specific case, you need to follow the below steps:

google ads budget allocation

Do Your Research

Before starting any paid search activity, it’s essential to compile a list of search terms that you think your target audience is likely to search for on Google.

Begin with keywords that show immediate purchase intent; for example, the keyword black leather shoes has more immediate intent than just shoes and will drive higher click through and conversion rates.

Explore Search Volumes & Cost Estimates

Your ad is more likely to be shown depending on the search volume and how many people are searching for your product or service. If search volumes are high, this generally means that competition within that market is more aggressive, so naturally, the costs will be higher. In this case, your initial investment in Google search may have to be larger to break into the active space and start gaining impression share.

Search terms with lower search volumes can be advantageous, as it usually equates to lower costs and less competition. When looking at search volumes, you can find these in Google’s CPC estimates (in Google Keyword Planner). These are estimates on how much you can expect to pay for one click on an ad, taking into consideration competition factors.

Adjust Bids Based on Demographical, Device & Location Performance

During initial research, you may have uncovered your ideal target market or a specific location. In this case, you should ensure your ads are served to these specific demographics or locations only.

Once these campaigns are launched, we recommend making monthly bid adjustments based on age, gender, devise and location, based, on how individual targets are performing against the account average. This could mean decreasing bids on tablets where the conversion rate is weak.

For example, cities that are driving traffic but aren’t converting. Alternatively, increasing bids to a specific age group who are driving higher volumes of conversions at a lower CPA (cost per acquisition) or have a strong ROAS (return on ad spend).

Altering bids allows you to show your ads more or less frequently based on where, how and when people search.

Spending The Right Amount of Budget

In terms of percentage split, we recommend investing at least 70% of your monthly budget on Google into your top conversion driving campaigns. These campaigns you know and trust to deliver high quality leads throughout the month.

At least 20% should be spent trying to find and invest in new opportunities. For example, new search campaigns, locations, and devices. These initiatives aim to be conversion drivers, but they are driving the entire account strategy forward and testing.

Save 10% of your monthly budget to try something new; look at this as your test budget. For example, a brand awareness campaign, targeting upper funnel keywords which might not naturally convert on a last-click conversion model, but are helping influence buyer behaviour and traffic to the site which can be remarketed to.

Which Google Ads Campaign Is Right for You?

which google campaign

Targeting potential customers throughout their buying cycle and the overall goal of your advertising campaign would depend on what channels are best suited.

For brand awareness campaigns, you’d allow higher budgets for more generic bidding on Google channels such as display and discovery.

If you’re focusing on ROAS, you would look at targeting audiences on their display / Gmail activity. Or possibly even using these channels for remarketing, utilising branded Google search, Google shopping or niche keywords which are likely to have higher conversion rates.

In digital marketing, we typically talk about the customer funnel – so we can use different methods of marketing and Google’s platforms to capture people at these different stages.

Here’s what we recommend and which campaign type does it best:

  • Awareness – Display / Discovery Ads / Gmail ads / Generic search
  • Consideration – Discovery Ads / Generic search
  • Conversion – Discovery Ads / Branded search
  • Loyalty – Retargeting
  • Advocacy – Affiliates and organic social 

Best Google Paid Search Campaigns

google paid search campaigns

Search Campaigns

  • Keyword specific targeting
  • Reach new customers
  • Target competitors audience and customers
  • Protect your brand name
  • Highly qualified leads

Display Ads

  • This is typically used for brand awareness
  • Connect with customers at the right time and in the right place on thousands of websites
  • Use targeted placements to reach relevant audiences for your brand
  • Display ads can be broken down into prospecting and remarketing

Discovery Ads

  • Drive conversions at scale
  • Reach new customers
  • Reconnect more valuable customers. As consumers return over time to find content on the Google feed that they enjoy

Gmail Ads (Soon To Be Discovery Ads)

  • Connect with potential customers
  • Use Google audiences to target certain groups of people

As an eCommerce business, running shopping campaigns on Google Shopping. Budgets are usually much higher on this platform as they tend to perform well.

Google Shopping Ads

  • Promote products on site
  • Boost traffic from a broader presence 
  • Better qualified leads

When deciding where to allocate your marketing spend, you need certainty when it comes to advertising in the right places to get the best return on your investment.

BOSCO™, The Digital Marketing Prediction Index takes a domain, budget, AOV, optimisation target and a retail category as inputs and uses machine learning to map a portfolio of keywords relevant to this domain along with a competitor set, which is then used to recommend an optimal budget split for better efficiency online.

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