What’s a good budget for a Google AdWords campaign?

A good budget for a Google AdWords campaign is one that you can afford and accomplishes your business objectives. It’s always a good idea to start with a small budget until you discover which ads and keywords are working and which are not; and fortunately, Google gives you total control over your own campaign budget.

Everyone’s resources and business objectives are different. Yet there are some basic calculations you can do to discover what budget you will need for a successful Google AdWords campaign.

Start with a business objective. For simplicity, let’s say you want to convert one product sale per day from Google AdWords. Next, calculate what it will cost to convert that one sale. Conversion rates vary by product and website, but 1% is a good starting point. This means it will take 100 clicks on your Google ads to convert one sale.

Now you’ll need to determine how much you’ll pay for each click on your Google ads. This amount varies greatly depending upon how competitive your keywords are and what your keyword quality scores are. Cost per click (CPC) can commonly run 50 cents or more. So multiply 50 cents times 100 clicks, and you discover that it will cost around $50 to convert a single sale. If this exceeds your budget or doesn’t make sense for your product or service, your options are to improve your quality score to lower your CPC or improve conversion rates on your website.

See: What makes people instantly click Google Ads now?