Allocating a Budget That Works – The Wrong Budget Costs More Than You Know

Google AdWords, as we know is the most effective form of targeted advertising and is extremely cost effective (when managed well). This comes down to the ability to customise just about every aspect and of course, only per-per click. Due to this pay-per click basis you need to develop a budget that can effectively handle the traffic you are trying to achieve. In order to maximise your potential you need allocate a budget that is right for you.


One of the most costly mistakes boils down to not allocating the right budget to your AdWords campaign. Generally what we find in campaigns is a budget that just simply won’t produce the results businesses require. In campaigns that come to us that aren’t performing well we will often find a budget that is quite low and based on little to no research.

When we ask people how they came up with their budget, you can almost guarantee the answer will be the same, “I wasn’t sure how much I needed and that’s how much I was willing to spend”.


Does sound like you? Well, you’re not alone.


Setting a budget is always difficult. Whether it’s for the work Christmas party or family groceries, it takes time especially when you have nothing to base it on. Determining how much to allocate to your Daily Budget is not easy and requires some base knowledge. But where do you start? Sure, you could just chuck your ad up and see how much it’s costing you after a month – although we see this approach on a regular basis, we certainly don’t recommend it.


Before you invest anything into your campaign, you need to ask yourself a variety of questions.


How many jobs do I need each week? How many clicks do I need to generate those jobs each day? How much do clicks costs for my keywords? How much am I willing to spend on each click? Will this generate enough money to become viable?


And these are just a few of the questions that you need to figure out in the development stages.


When we’re setting a budget we’re looking for a Goldilocks scenario, we want it to be just right. If your budget is too low, your campaign generally won’t generate enough traffic to lead to conversion rate suitable for your business. Or if you set your budget too high, you could be generating huge amounts of traffic but if you can’t handle the work you will be cutting into your profits. The trick is to find the right formula somewhere in the middle that maximises your return on investment.


The best place to start is by jumping onto Google’s Keyword Planner, which will breakdown just about every keyword on AdWords and provide a suggested bid for each search term. This is the best way to determine a budget that’s relevant to your business but is just the start. Figuring out how to best use this budget through advanced bid strategies, ongoing optimisations to continually reduce your conversion costs.  
Even if you have a comprehensively built AdWords campaign that is targeted to the most relevant audience, without a suitable budget your campaign is limiting it’s potential. It’s just like having a high performance racecar and forgetting to fill it with petrol. It could be the fastest car on the track but without any fuel, it’s not going anywhere. And your AdWords campaign is no different. Your budget is your fuel, putting in enough of the right stuff will get you where you need to be and then it’s just a matter of deciding where you want to go.

Please follow and like us:

One thought on “Allocating a Budget That Works – The Wrong Budget Costs More Than You Know

Leave a Reply

Your email address will not be published. Required fields are marked *