Choosing Your Google Ads Budget –
Before we even begin I would like to remind you that conversions are inquiries, not necessarily sales (at the bottom of the article I elaborate)
Choosing your Google Ads budget can often confuse businesses. But it’s not as difficult as what it may seem. To figure out how much you can spend on Google Ads you use simple mathematics.
To know how much you should spend on Google Ads you first need to know your profit per sale and your industry conversion rate, which could differ from business to products or services offered.
Below we use an Addiction Treatment Center as our example:
If you are an Addiction Treatment Center and your service costs to a client is R40,000 for a period of a month and out of that R40,000 you make R10,000 profit then R10,000 will be your profit per client.
In this instance conversion rate is the number of leads that occur per visit to your website. If 1000 people visit your website and 10 people contact you, then that is a 1% conversion rate.
Would you be willing to make R9,000 per client instead of R10,000? That means you would be able to pay R10,000 (R1,000 x 10 conversions) per month to gain 10 new inquiries. So for 1000 clicks at a 1% conversion, you could afford to pay R10 per click.
If you are able to spend R2,333 a week (R10,000 a month) you should acquire 10 new customer inquiries per month. Your daily Google Ads budget would then work out to roughly R333 per day, which you can then run on ‘Standard Delivery’ which spreads your bucks evenly throughout each day of the month.
‘Accelerated Delivery’ might chomp-up all your bucks in one day or one week!
Conversion Rate Explained
Conversions are inquiries, not necessarily new clients. To be able to establish an accurate figure we first need to look at your previous success rate.
How many of your existing email inquiries turned into new clients?
If the answer is 50% – you will then gain 5 out of the 10 clients that contact you via your Ads campaign.
Your Ads budget of R10,000 a month could then return (5 clients x R9,000 per client) R45,000
By hiring a Google Ads expert could even double your existing return. Contact us today for Ads advice or campaign management
You can track conversions in Google Ads via direct sale, email or telephone contact. So if a user completes your email form and clicks submit it will be classed as a conversion, and if a user contacts you via phone it will be classed as a conversion.
The majority of traffic is now on mobile. For that reason, it will be wise to use call extensions on Ads. The user can then contact you directly, which will be charged as a single click.
On A Final Note:
Our main goal will be to convert website traffic into positive leads. Its then up to you to sell your establishment to clients. If your final email or telephone marketing strategies are poor, or your prices are higher than your competitors you will have less of a success rate in converting leads to sales, in comparison to your competitors.