Building a Google Ad Budget
The business of digital marketing is just that–a business. That means many of our clients’ top priorities are a balanced budget and a noticeable return on investment.
The discussion of budget and how much is spent on ads is top of mind for many businesses and organizations. When calculating how much to spend on digital advertising, there’s no “one-size fits all.” When building your digital marketing budget, there are a few things to consider: what are your goals, how many customers do you need to reach that goals, and how much will that cost?
What are your goals? This is the time to get specific about what you want out of your digital marketing. You obviously want to sell your product or service–but how many sales will it take for you to reach your next benchmark? Put a number on that goal, so you can more accurately make a plan for how to accomplish it.
How much traffic will it take to reach that goal? Take a look at the numbers on your website. How many visitors do you receive in total, and how many of those visitors make a purchase? This number is known as your “conversion rate.” You can find this number by looking at your Google Analytics. Scale that ratio up until it achieves your goal. This new ratio is useful because it becomes part of the equation that will form your budget.
How much will your goal cost? Here’s where you plug in the numbers and get some answers. The average cost-per-click (CPC) for a Google Ad is between $2-$4, depending on your industry–so let’s overshoot and say it’s $4. Multiply 4 by the number of visitors you need to reach your goal, and voila, a budget! This is just one simple method and a starting point for getting an idea of the amount you can expect to spend on Google Ads.
Using this equation can work in many different ways. For example, if you have a set budget you can spend, divide that number by the CPC and you have an estimate for the amount of sales you can expect.
Let the experts at Vibrant handle your digital marketing. Contact us today!