Google Ads Budget Management: 5 Ways to Maximise Your Google Ads Budget

Google Ads are an integral facet of millions of businesses’ digital marketing campaigns. When done correctly, you stand to make a lot of money through your return on ad spend (ROAS), with lots of companies generating a good portion of their profits through pay per click (PPC) ads alone. It’s not all sunshine and rainbows, though. If you’re not careful, Google Ads can quickly eat into your marketing budget and leave the coffers bare, making it extremely important that you know how to maximise your budget rather than just pumping more and more cash into it.

how to reduce google adwords cost per click - The Brains
September 16, 2022
10 mins to read
how to reduce google adwords cost per click - The Brains
Budgeting is the key to life and certainly plays a huge role in marketing. When money gets tight, the first place CEOs look to cut costs is marketing, so before they have a chance to snatch your precious budget, you need to show them that you’re using everything you have been given in the most efficient, maximalist way possible. That’s easier said than done with Google Ads, but with a little bit of know-how (which we’re about to provide), you can begin to get all your ducks in a row.

How Google Ad budgets work

Before we explore how to make the most of your budget, it’s important to understand exactly how Google spends your money and how it determines how much to take. 

In essence, Google Ads works a bit like an auction house. You make bids on keywords that you want your ad to show up for. If your bid is successful, Google will charge you the amount you bid for every time a user clicks on your ad. If your ad appears for a high search volume term and you get hundreds or thousands of clicks every day, it’s clear to see how your budget will quickly be eaten up. The trouble is, if those clicks don’t turn into a conversion, you’ve essentially lost money. The key is figuring out why the user hasn’t converted – it could be your website, or it could be the ad itself.

how to reduce google adwords cost per click - The Brains

How to determine a Google Ad budget

Google Ads will generally not spend more than you set your budget for. For example, if you set your daily ad spend budget to £10, Google typically won’t spend more than £10 a day, but there are nuances. Google has the right to increase the spend by up to 20% in cases where the algorithm believes there’s a high chance of conversion. Usually, it gets balanced out on the following days by spending under the daily budget. The trouble is, with this, along with the daily limits you set, mean it doesn’t necessarily take long for your £10 to get eaten up, and if users aren’t converting, you won’t be gaining anything from it. So, what’s the magic formula for setting up a Google Ads budget?

“When it comes to Google ads, there is indeed a specific formula that calculates the budget. It takes into account the monthly keyword queries, performance predictions, and competitors, etc. However, very often factors such as seasonality, bidding strategies, how bidding works are disregarded. 

“It’s quite common that a campaign with a budget of £10 can outperform another competitor’s campaign with a budget of £50. For those who are just starting out with Google Ads, I highly recommend starting with a smaller budget and testing the performance. 

“The data that will be generated by the campaign is your most reliable source and best indication if the budget should be reduced or increased. In this way, you will find your ideal budget before you know it. 

“So the formula is: start small, spend wisely, analyse the data and keep in mind that success isn’t always equated to how much you spend.

  • Iva Ivanova, Account Strategist at The Brains

In simple terms, the following route can be used to to come up with a budget:

  1. Look at the Google Keyword Planner to get an idea of suggested bids, competition ferocity, and monthly searches on specific search terms.
  2. Run test campaigns – these are often not profitable but work like A/B testing to show you what might work and what might not.
  3. Use data from test campaigns and Keyword Planner to budget your daily and monthly spend (multiply your daily spend by 30.4 to get your estimated monthly budget). 

It’s important to note that every business is different. If you sell high-ticket items like cars, you should expect to budget more for your Google Ads than a retailer that sells clothes, for example. This is because your ROAS will be a lot higher and you don’t need to make as many sales to recoup your ad spend, whereas businesses selling cheaper items will likely see more traffic and need to sell more to break even. That being said, every business should look at ways to maximise their budget – otherwise, you could find yourself in a bit of a money pit.

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How to reduce Google Adwords cost per click

Not every business or agency has the highest budgets to work with, and that means you need to be clever in how you go about setting up your ads so that you can get the most out of them without dissolving your entire budget. There are a few different ways to do this, but the five methods outlined below are a good starting point for any PPC campaign that is budget-conscious.

  • Create targeted and specific campaigns 

The first step is to create different campaigns across your entire PPC budget. This works similarly to products and categories on your website. For example, if you sell lots of different types of flowers, you likely have them listed in different categories on your website, such as wedding flowers, anniversary flowers, and funeral flowers. Having different categories means users find it easier to navigate to the products they want, and the same goes for Google Ads. 

If you set up one campaign targeting ‘occasion flowers’, not only is this going to be far more difficult to rank for, but it could also eat into your whole PPC budget and leave users on a page that isn’t necessarily relevant to what they are looking for. 

By setting up separate campaigns for wedding flowers, anniversary flowers, and funeral flowers, you’re able to cover more ground, but also ensure your budget is being spent where it’s most needed. For example, spring and summer are peak wedding seasons, so you might choose to pump more of your budget into that campaign in the lead up to the wedding season. You can also begin to capitalise on certain holidays, such as Valentine’s Day. 

Specific campaigns enable you to target more search terms, restrict your budget and spend it where it’s most relevant, and direct relevant traffic to appropriate pages on your website. 

  • Target ads to particular locations 

One of the big issues for businesses that have a brick and mortar shop and want to drive foot traffic to their location is that oftentimes, irrelevant traffic slips through the net and skews figures. This doesn’t just happen with physical shops, though. If you have a delivery service but can only deliver to mainland UK, you won’t want international traffic coming through. Unless you target your Google Ads to specific locations, this is exactly what will happen. 

So, with this in mind, head to your targeted settings and input locations that your ad should be shown in. If you’re a local business and want to stay that way, set your radius to close to where you’re based, but if you want to go nationwide, try targeting big cities and towns. 

Once you do this, you use Google Analytics to identify the areas where most of your traffic and conversions come from, giving you an insight into more viable customer bases. This means you can focus more of your budget in areas where people are more likely to be interacting with your business, as opposed to areas where they won’t be interested or you can’t service.

  • Look at long-tail keywords 

There are two main types of keywords: short-tail and long-tail. Short-tail are usually the most sought after keywords because those are the terms the majority of users are searching for, but they’re highly competitive. Bidding on these keywords can be tricky; lucrative if you get it right, but tricky nonetheless.

In this instance, look at integrating long-tail keywords into your PPC campaign. Though they are three or more words and not often as searched-for as short-tail keywords, they can still be lucrative. As an example, as well as trying to target ‘wedding flowers’, also try and target ‘autumn wedding flowers’ or ‘spring wedding flowers Sheffield’. These are more niche terms but ones that people will still be searching for, further enhancing the relevance of the traffic that comes to your site and increasing the chances of a conversion. 

  • Target lower SERPs positions 

The first instinct of any marketer is to try to get to the top, and the same applies to PPC. For this reason, you likely have an itch to get your ad into the top three spots under the guise that, if your ad sits here, you’ll get the bulk of clicks. This isn’t necessarily the case, though, and it costs considerably more to position yourself in the top three positions than it does to get yourself in the fourth spot. 

Whilst lots of users will likely click on the first few ads they see, this isn’t always the case and it doesn’t automatically mean that you’re going to generate conversions. With this in mind, look to show up further down the list. It’ll cost less and could even bring you a higher conversion rate, particularly amongst consumers who are shopping around and comparing brands. 

  • Closely monitor and adjust campaigns 

The success of PPC campaigns comes down to how you interpret your metrics. Google Ads has a host of reporting tools where you can really do a deep dive into user behaviour and determine what is working and what’s not. Too many marketers make the mistake of assuming that poor metrics are the final nail in the coffin for a campaign, therefore closing the lid on it and moving onto something else. This isn’t the case. 

If a campaign isn’t working quite as well as you’d hoped, don’t resign it to the ‘failed’ pile. Look at your metrics and try to figure out why it hasn’t worked. Make adjustments to your bids or even the ad text. Think of ads a bit like you do A/B testing – you need to figure out what resonates the most. The only way to do this is by trial and error. You shouldn’t expect to get it right first-time; success is earned and rarely happens through luck, so make sure you emphasise your metric efforts and make adjustments where necessary.

Final thoughts

Google Ads is a bit of a beast at the best of times. Like all great things, it’s a double-edged sword. You stand to gain a lot from it, but you can also lose a lot from it, too. The tips above are a good starting point if you’re wanting to focus more on using your budget in a savvy and efficient way, but even then, it can be hard for novices to get a good head start. 

Luckily, there are PPC Brains who live and breathe Google Ads, and they’re on hand to give you the leg-up you might be in need of. If you’re struggling to maximise your Google Ads campaigns, get in touch with us today to find out how one of our dedicated PPC strategists could help you super-charge your ad output.

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