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Advertisers pay for results, the most common method being for each click generated on their ad, in a concept called "cost per click" (CPC). This payment is not fixed, but is defined by an auction, depending on the quality level of the word with which they want to advertise.
Thus, it is necessary to define the campaign budget in the best possible way, trying to optimize resources , for which some of these tips can be useful:
Consider the objective of the campaign and the situation of the company
An important point to take into account is the company's needs and the objectives of its campaigns. Regarding the requirements, it is vital to evaluate which products or services require digital advertising, so that the focus is directed towards meeting that need.
It also depends on the objective of the campaign: do you want to launch a new product? Improve sales of existing products? Improve engagement with your customers? Each of these objectives should have different budgets allocated to it.
Remember that every new effort must be driven by the necessary tools. Advertisements drive the interest of the target audience in the company or product, so it is essential to make attractive advertisements. We tell you how to achieve this here.
Take seasonality into account
Depending on whether you want to advertise in high or low season, the cost will clearly be different. Therefore, when defining the company's budget for Google Ads, whether annual, monthly or per campaign, it is necessary to take into account the seasonal changes , both those that affect the market in general (Christmas, for example), as well as those specific to the industry to which the company belongs.
Differentiate campaigns by products or services
It is clear that not all of a company's products or services need the same promotion, so it is important not to distribute the marketing budget equally among them.
It may be that one of the products in the catalogue has a considerably higher margin than others but is not receiving as much attention from customers. In that case, the wisest option would be to focus on advertising that product. Thus, it is necessary to strategically distribute the budget for this type of campaign.
Try not to invest too little
Just like the economy of scale, by investing very little in a Google Ads campaign, there will be very few impressions, clicks and conversions, making the analysis of the results very slow and the campaign will probably last a short period of time (when the budget runs out), so this campaign will probably not be very effective.
How to define the budget?
To start a campaign correctly, you must do some research on the keywords you want to work with, which must be related to what you want to advertise. Then, using Google's "keyword planner", you must see the search volume generated by these words, evaluating whether they can really be useful.
In this tool, you can also see the cost per click (CPC) and conversion rates (CTR) for each keyword searched. Then, to see the total cost of the campaign, you must apply the following formula:
Total budget = CPC * (CTR * Monthly search volume)
Finally, the campaign's performance must be monitored during its duration (using Google tools), since if it is not having the expected results (in terms of impressions, conversion or other), then the parameters of said campaign can be modified and adjusted on the fly.
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Projecting the budget based on expected results
Taking into account the above tips, along with well-written ads and correctly selected keywords, it is possible to define the budget according to the objectives, based on historical information from previous campaigns. The elements that are needed are the following:
