As more and more people turn to the internet to find products and services, it’s become increasingly important for small businesses and startups to advertise online. One of the most popular online advertising platforms is Google Ads, which allows businesses to present their products or services on the Google Search Engine Results Page (SERP) above organic results. There are campaigns to place ads on other properties like Youtube, Gmail, Google Maps, Display Network, and Discovery Network. The benefit of advertising on Google ads is that it has an intent-based audience that can be in the consideration or conversion stage.
However, determining how much to spend on Search Engine Marketing (SEM) can take time and effort. This blog will explore how small businesses and startups should arrive at their SEM budget.
Determine your advertising goals.
Determining your advertising goals is the first step in arriving at a budget. What do you hope to achieve with your campaign? Do you want to increase website traffic, generate leads, or boost sales? Your advertising goals will help you determine how much you should spend on your Google Ads campaign.
Identify your target audience.
Once you’ve identified your advertising goals, it’s essential to identify your target audience. Who is your ideal customer? What are their demographics? Knowing your target audience will help you create targeted Ads that are more likely to convert.
Estimate your conversion rate.
Your conversion rate is the percentage of people who take a desired action after clicking on your Ads, such as filling out a contact form or making a purchase. You can look at historical data from your website or industry benchmarks to estimate your conversion rate. Your estimated conversion rate will help you determine how much you should spend on your Ad campaign to achieve your advertising goals.
Determine your cost per acquisition.
Your cost per acquisition (CPA) is the average amount you spend to acquire a customer through your Ads campaign. To determine your CPA, divide the total cost of your marketing cost on other mediums by the number of customers acquired. Knowing your CPA will help you determine how much you should spend on your Ads campaign to achieve your advertising goals.
Consider your budget.
While it’s essential to determine your advertising goals, target audience, conversion rate, and CPA, it’s also important to consider your budget. How much can you realistically afford to spend on your Google Ads campaign? Your budget will determine the size and scope of your Google Ads campaign.
Research keyword costs.
Google Ads uses a bidding system to determine which ads appear on its search results pages. The cost of each keyword varies depending on factors such as competition, search volume, and relevancy. Researching keyword costs will help you determine how much you should spend on your campaign. There are tools in the Google ads account, like Keyword Planner. There are external tools like SEMrush can also help you do that planning.
Test and refine your campaign.
Once you’ve arrived at your Google Ads budget, testing and refining your campaign is essential. Monitor your Ad performance and adjust your budget and targeting as needed to achieve your advertising goals.
Appoint a Google Ads Manager.
Managing and optimizing a Google ads account requires continuous effort. It needs regular traffic monitoring, adjusting keywords, adding negatives, checking click-through rates, adding ad copy, improving ad strength, location targeting, device targeting, bidding, and budget management. If you are overburdened with your business responsibilities, involving a certified Google Ads Expert to manage your account might be a good idea.