Category: Google Ads
January is when a lot of business owners sit down with a spreadsheet and decide what they’re going to spend on marketing for the year. If Google Ads is on the list, the first question is usually the hardest one. How much should you put in?
Google won’t give you a straight answer. There’s no minimum spend, and you can set your budget to almost anything you like. That sounds helpful, but it means plenty of small businesses either spend too little to learn anything, or too much before they know what works.
The honest answer is that the right budget depends on three things: what a new customer is worth to you, what a click costs in your trade around Salisbury, and how many enquiries you can actually handle. Once you know those, the number more or less works itself out.
Why there isn’t one figure that suits everyone
With Google Ads you pay each time someone clicks your advert, and the price of that click is set by an auction. The more businesses that want to appear for a search, the more each click costs.
That means the cost varies enormously from one trade to another. A click on a search for a solicitor or an emergency plumber can cost several times as much as one for a dog groomer or a café, because each customer is worth more and more businesses are competing for them.
Where you are matters too. Salisbury and the towns around it are generally less competitive than a big city, which is good news if you’re advertising locally. But that varies by trade, and a busy local market such as builders or estate agents can still be expensive.
Start with what a customer is worth
Before you think about Google at all, work out roughly what a new customer is worth to your business. Think about what they’re likely to spend with you over time, including repeat work, and how much of that is profit.
A kitchen fitter in Wilton who makes a good margin on a few big jobs a year can afford to pay much more for each enquiry than a takeaway in Amesbury selling a £15 meal. Both can do well from Google Ads, but their budgets will look completely different.
It’s also worth being honest about capacity. There’s no point paying for twenty enquiries a week if you can only take on five new jobs. A deliberately modest budget can be exactly right for a business that’s already busy and just wants a steady trickle of the right sort of work.
Work out what a click is likely to cost
Google’s Keyword Planner, which is free inside any Google Ads account, will give you a rough idea of what clicks cost for the searches you care about. Put in the things your customers would search for, set the location to Salisbury and the area you cover, and it will show a range of likely costs.
Treat those figures as a guide rather than a promise. They’re estimates, and the real cost will depend on how good your adverts and your website are, as well as what your competitors are doing that week.
A worked example
Here’s how the sums might look for an imaginary roofer based in Salisbury. The figures are made up to show the method, not taken from a real account.
Say a click costs around £4, and about one in every ten people who click ends up getting in touch. That means each enquiry costs roughly £40. If the roofer wins about one in three of those enquiries, each new job has cost around £120 in advertising.
If the average job is worth £1,500, that’s money well spent. If the roofer wants four new jobs a month, they’d need about twelve enquiries, which means about 120 clicks, which means a budget of around £480 a month.
Your own numbers will be different. But working backwards like this, from the jobs you want to the clicks you need, gives you a budget based on your business rather than on a guess.
How Google actually spends your budget
When you set up a campaign, Google asks for an average daily budget rather than a monthly one, and this catches a lot of people out.
On any single day, Google can spend up to twice your daily budget if it thinks there’s more traffic about. To balance that out, it won’t charge you more than your daily budget multiplied by 30.4 (the average number of days in a month) over a month. So a daily budget of £10 means you’ll never be charged more than £304 for that campaign in a month, even though some days will cost £20 and others less.
So if you’ve worked out a monthly figure, divide it by 30.4 to get your daily budget. Just don’t panic if one day’s spend looks high.
When a budget is too small
There’s no minimum, but there is a point below which Google Ads stops being useful.
If your budget only buys a handful of clicks a week, you’ll never get enough enquiries to tell what’s working and what isn’t. You might get one call from an advert and none from another, and that tells you nothing. A small budget spread across lots of searches, a big area and all hours of the day is one of the most common ways small businesses end up deciding Google Ads “doesn’t work”.
If your budget is tight, the answer is usually to narrow things down rather than give up. Pick the searches closest to someone being ready to buy, such as “emergency roofer Salisbury” rather than “roofing”. Show your adverts only in the area you really cover, and only when someone is there to answer the phone. That way a smaller budget goes a lot further.
Don’t forget the cost of running it
Your budget with Google is only part of the cost. Someone has to set the campaigns up, write the adverts, keep an eye on the search terms and adjust things as you go. If you do it yourself, that’s your time. If you use an agency, there will be a management fee on top of what you pay Google, so ask how it’s worked out and make sure you know which part of your money is going where.
We’ve written before about getting the most from your marketing and advertising spend, and the same principle applies here. The point isn’t to spend as little as possible. It’s to know what each enquiry is costing you.
Give it three months, then look again
Whatever figure you settle on, treat the first three months as a test. You’ll quickly see what clicks really cost, which searches bring in enquiries and which ones just spend money. After that you can decide whether to put more in, take some out, or move it around.
And keep an eye on who’s giving you advice. As we said in our post on getting the most out of your PPC, Google is very helpful when it comes to suggesting you spend more, because it earns money from every click.
If you’d like help working out a sensible budget for your business, the friendly, experienced team at Spire Digital manage pay-per-click (PPC) campaigns for businesses in Salisbury and the surrounding area. Give us a call on 01722 320 500 and we’ll talk it through with you.