Google AdWords Budget Guide 2020
Search Engine Marketing (SEM) budgeting is always a chore. Always. Whether you’re pinching your budget to pay rent for an overpriced office in the Singapore central business district (CBD) overlooking a dingy alley, or paving the road to becoming a tech startup unicorn, or both, simultaneously, it drives the average Singaporean up the wall.
There are many ways to mitigate the insanity. There is, however, no way to completely avoid budgeting properly without going through some standard ways. This is especially true in Google Ads, formerly known as Google AdWords, where every single click represents either business growth or your hard earned cash becoming wasted.
Unfortunately, resources that take an all-encompassing approach to Pay-per-click (PPC) budgeting are scant. There’s no free app. No free lunch. You just have to figure it out. Or you employ agencies or freelancers to do some work for you. There’s a big difference between working with Google Premier Partners and freelancers. You get unrivalled knowledge, expertise, commitment to work and importantly, experience! You have to pay for all these, yes. But ultimately, you win more via an increase in your business.
To help you get a better understanding of proper Google Ads budgeting strategy from the ground’s up, we’ve put together the following guide. It’s broken into 3 easy-to-digest sections:
- Determine your Google Ad spent budget
- Segregate budget spent into campaign types
- Introduce new campaign
1. Determine your Google Ad spent Budget
You’ve given your credit card information and funded your Google Ads account. You’ve just downloaded Google Ads Editor. Now what?
You need to determine how much money you want to spend in your first quarter. Month. Week. Day. Hour. No. Your first click. Are you ready for this? Do you need SEM expertise from outside your company at this point? Are you confident to bring this to fruition using your own resources, or just by yourself?
There are four key questions you need to ask yourself when determining your initial Google Ads budget:
- How does Google Ads fit into my current marketing strategy? Think about your TV ads, Radio exposure, Events Marketing this year, Social Media, offline media and etc.
- What (and where) are my competitors spending? Are your competitors big on digital? Or are they merely scraping the surface?
- How much are the CPCs (costs per click) for the keywords I’m bidding on?
- Which KPI (key performance indicator) matters most to me? Do you want more brand exposure? Or would you prefer more leads being generated for your sales team?
Once answered, you’ll be ready to dive into campaign types, optimization, and eventually, expansion. With that in mind, let’s jump into those questions.
How does Google Ads fit into your current marketing strategy?
If your business is a staple of the local community or has a well-established online presence (you’re a thought leader driving organic traffic to your site with great SEO and even better content), there’s a good chance leads will show up at your doorstep ready to buy. Conversely, a fledgling business with its finger on the pulse of its target audience can achieve something similar through a rabid social following. Other than time and the salaries of whomever spearheads these efforts, this organic traffic is “free.”
Consider also the other marketing channels you employ in an effort to grow your business. SEO. Cinema advertising. Outdoor bus ads at Toa Payoh Central. Purchased leads. Radio spots. TV Commercials. Events. Even the branded mooncakes during the Mid-Autumn Festival!
List out each marketing channel you use and think about this: Is the goal of your Google Ads account to support existing efforts (to give people a way to use the giveaway code perhaps) or to eventually supersede them?
What (and where) are your competitors spending?
Google your company’s name. Go ahead. Now, what do you see at the top of the SERP? Do you see competitors buying and bidding for your name? How do you feel when that happens? You’re proud that your competitors take you seriously enough to bid for your name? Or you feel uneasy that you’re potentially losing traffic and business to your competitors?
Outside of your branded keywords, you can use a tool like the Keyword Planner or SEMRush (I wouldn’t pay any mind to the qualitative information available, but the keyword lists and sample ads can be valuable) to get an idea of where your competitors are spending their Google Ads budgets.
Armed with this information, you can develop strategies to unseat their ads from the SERP, and find (cheaper) keywords nobody was smart enough to bid on before you came along. If you’re too sure on this, check with your appointed SEM agency working with you on the campaign.
How high are the CPCs for the keywords that you’re bidding on?
The most basic way to determine a budget is to consider the cost of the keywords you’re bidding on. Should this be the only information you use to establish a budget? Absolutely not. But it’s a nice starting point. This can make or break your SEM campaign.
Go to the Google Ads Keyword Planner and enter your landing page URL into the interface. Adjust the remaining parameters accordingly (industry, location, terms to avoid, etc.) and prepare to scroll through pages of prospective keywords along with their relative popularity and advertiser competition. We’ll suggest that you download this as a csv file and come through this diligently with your sales and marketing team.
Now try the same thing with the page that corresponds to each of the products or services you offer. This will no doubt uncover undervalued search terms for you to bid on. Ideally, you want to seek out as many high-traffic, low-competition terms (that also conveys positive commercial intent) as you possibly can. That’s your sweet spot.
Keywords that indicate urgency or familiarity are more likely to convert than ones that don’t. For example, compare these 2 keywords - ‘cheap waterproofing services in Singapore’ and ‘waterproofing’. Which keyword do you think would generate a more positive lead?
Which KPIs (key performance indicators) matter most to you?
We’ve saved the most important question for last. A KPI is a measurable value that lets a business or individual gauge performance. Not every business cares about the same thing. Over at iClick Media, we diligently track every single conversion point. It can range from a telephone call (Yes, we can track a call!), WhatsApp message, a contact form enquiry, direct email lead, so on and so forth.
For some, CPA is the be-all-end-all. I cannot tell you how many client meetings begin with a cost per acquisition plucked from thin air. Clients usually conveniently tell you that their CPA is say $20. If you can do it, great, let’s talk. If you can’t, sorry, next agency please!
If you’re sure this is the KPI for your client’s business, set a goal grounded in logic. If something more concrete is your style, you can figure out how many conversions tracked through Google Ads it takes on-average to result in a bona fide client and determine your actual CPA.You may need to request for access from your clients to go into their Google Analytics. From our experience, many companies are not tracking this so it is tough for you to put in a number in your proposal and ultimately, in your SEM contract.
You can also leverage your existing CPA from other channels, make that your goal for paid search, and ratchet up or down accordingly once you’ve got more account data to work from. There are many other KPIs businesses use as barometers for successful Google Ads campaigns. If you’re unsure of which is best for your business, do check in with your appointed Google Premier agency to get the best advice. There’s a reason why they’re appointed by Google as their premier agency so tap on their expertise!
Once you’ve answered these four key questions, go take a look at your findings. To determine your ideal budget, you’re going to want to think about the KPI(s) that you’re going to judge performance on and the number of sales or leads you’re looking to garner from Google Ads. Look at the other marketing channels you’re using and try to apply any relevant goals you’ve established as your Google Ads starting point. Finally, consider the cost of keywords you’re likely to bid on by examining the ones your competitors have already chosen (and the ones they haven’t).
2. Segregate budget spent into campaign types
Generally speaking, each of your Google Ads search campaigns is going to fall into one of the following five categories: research, branded, competitor, high intent, and top performers. Logic dictates that the majority of your budget should be funneled to your top-performing keywords, but what do you do with the rest?
Research top of the funnel keywords
More often than not, someone new to paid search is going to build campaigns targeting top of funnel terms. An entrepreneurial yet woefully under-informed lawyer or law firm, for example, will bid on “lawyer singapore”. Makes sense, right?
Unfortunately, in most industries these types of keywords cost an arm and a leg. For the term above, Google recommends a bid of just over $5 to be listed on page 1 of the SERPs. And that’s per click. Yikes. Considering there’s 1,300 searches per month in Singapore for the keyword, the cost for this keyword alone would be $6,500 per month!
To give another example, let’s imagine you’re in the highly competitive business card printing industry. Take a look at these search terms:
Obviously “business cards” keyword has the most average monthly searches. But consider the searchers themselves: They are probably people who’ll never complete an order. At a suggested $8.75 per click, I’ll pass. I’d rather spend that $8 on search queries that convey intent (like “buy business cards” or the slightly pricier but more commercial “order business cards”).
Now, this isn’t to say that top of funnel keywords are all overpriced or useless. They’re a great way to build awareness and add prospects to your remarketing lists, but if you bid on them, do so intelligently. Spend $1.33 per click on a query like “free business cards” and remarket the heck out of your prospects. When the time comes for them to take their startup from a 1-man show to a 1,000 sqft operation in Shenton Way, guess who’ll be in the back of their mind?
Even though your website should be the first thing that shows up in the organic results when someone searches for your business, there’s a big old chunk of real estate above the organic listings that your competitors are welcome to claim, if you don’t.
Here’s a real-life example. I was stuck at home during the Singapore circuit breaker due to the Covid19 pandemic. I was casually searching for advertising platforms and learning more. When I googled for the keyword ‘yahoo ads’, guess what I saw? LinkedIn was buying this term!
Competitors are forced to pay a premium to bid on your brand, but the CPCs you’ll see for the same terms will be considerably cheaper. Your domain and landing page copy will be hyper-relevant to the keywords, resulting in maxed out Quality Scores and lower costs. In short, while branded terms should by no means be the only ones you’re bidding on, allocating spend to ensure SERP domination is a must!
Remember everything I said about branded terms? When it comes to bidding on your competitors the opposite holds true. Just as you did with the top-of-funnel terms, you’re going to want to leverage research and common sense to ensure you’re not blowing budget on search queries that will never convert.
One crucial mistake advertisers make when they start advertising on competitors is bidding on the wrong competitors. As a rule of thumb, when choosing competitors to bid on, make sure you’re choosing companies that you are actually competing against. Choose competitors who you feel you have a competitive advantage over, whether it be better prices, bigger supply, faster speed delivery, etc.
High Intent Keywords
If top of the funnel terms are a (costly) wild goose chase, high-intent keywords are golden eggs dropped into your lap.
High-intent keywords come in two flavors: “buy now” and “product.” You’re going to want to ensure the biggest slice of your search budget is being used to bid on keywords that fall into one of these categories (bonus points if you can unearth search terms that live somewhere in between).
“Buy now” keywords are those which, broadly speaking, indicate that a prospect is ready to pull the trigger on your product or service. They’ve done their research (or been referred by a trusted confidant) and now it’s time to buy. Typically, “buy now” keywords are comprised of top of the funnel terms appended with words like:
- Free shipping
To illustrate the difference between research and intent-to purchase, take a look at the keyword “candle” followed by buy-now iterations:
Now, we’ll address the obvious first: search volume for “candles” is exponentially greater than that of the other keywords combined. But the other keywords show more intent to buy. It goes without saying, but be sure to address the specific modifier you’re bidding on in your ad copy. In Google Ads system, there are modifiers such as Broad Match Modifier, Exact Match, Phrase Match and etc. If you’re not sure about all these terms, you probably want to check with your appointed SEM agency on this.
Product/service keywords include:
- Branded searches (iclick media, iclick media singapore)
- Specific products or services (“seo services”, “web design” etc.)
- Product categories
This is a much broader category, and not every sort of product keyword is going to become a top-converting term for your business. That being said, the only way to figure out what doesn’t work is to test everything in as calculated a way as you possibly can. If something breaks the bank, pause it. If something converts at a CPA well below the account average, you’ve got a top converter on your hands.
Top Performing Keywords
Once you’ve been running your Google Ads account for at least 30 days, you’ll have an idea of which keywords are worth your money and which aren’t. The middling terms—ones that your ads show for consistently but never seem to earn clicks—represent opportunity. Focus your efforts on writing great ad copy for these keywords. Make changes to your landing page. Triple-check your ad extensions. If, after a few weeks you’re still not seeing any clicks (or worse, you’re seeing clicks but no conversions), put ‘em on the chopping block.
By moving your top performing keywords into their own campaign(s) you afford yourself more control over how much of your budget is spent on keywords that have, historically, done well. The advantage? No longer is the single converting keyword in an ad group lumped in with twelve other terms that do nothing but syphon your budget away.
A word of warning, though: by moving a keyword out of its original ad group, you lose. Since in the scenario I’m describing above the account is relatively new, it makes more sense to move underperforming keywords into new campaigns.
3. Introduce new campaign
Search is the backbone of most Google Ads accounts, but the platform gives advertisers a few other options, too: display and remarketing (usually through display, though remarketing on search can also be effective). Of course, there’s also shopping, YouTube, etc but that’s another post unto itself.
Depending on your verticals, these alternatives can complement or completely replace traditional search advertising. Either way, they can dramatically impact the way you spend money on Google Ads. Let’s take a closer look.
The clicks are cheaper than they are on traditional search, but with the significant drop off in direct conversions, is the Google Display Network really worth it? The short answer is yes. Absolutely!
Remember that when you are doing digital advertising, the important part of the advertising is the intent of the user. When you run a GDN campaign, the people seeing your ads don’t really have much of it. They are probably reading Channel News Asia online, surfing popular forums, etc. Display is closer to traditional advertising (think TV advertisement) than search, with the added benefits of better targeting and on-demand analytics.
Outside of remarketing, the Display Network has three main functions—brand awareness, showcasing your product, and helping a lengthy sales process along—and puts a plethora of targeting options at your disposal. There’s got to be a catch, right?
The lack of conversions directly attributable to the GDN can make it hard to justify, especially for small businesses with limited budgets. That being said, there are ways to dip your toes in display without lighting money on fire.
When we work with clients looking to give Display a go, I recommend they start with managed placements or In-Market audiences. Without going into too much detail, this gives you the ability to show banner creatives on specific websites or to people whose browsing history indicates that their interests align with what you offer. If you have success here, check out some of these other strategies and grow your Display budget to create the perfect complementary network strategy.
Let me begin with the following: if you run an ecommerce business and dynamic remarketing (remarketing ads that show site visitors the product or products they actually looked at on your website) isn’t set up, take the rest of your day to follow this guide. Remarketing is an essential component of Google Ads. Every business in every vertical can gain from its use.
An easy way to determine your initial remarketing budget is to calculate the percentage of conversions that come from returning site visitors and then allocate that same percentage of your spend to remarketing. Too abstract? Let’s look at an example.
Say your online candle store garnered 1,000 clicks last week and sold 100 of the finest candles last week on Google Ads, and 10 of them were purchased by returning visitors. Assigning 10% of your search budget to remarketing gives you the chance to bring the 900 non-converters back to your website.
Some account managers are opposed to remarketing because it means you’re paying to bring the same person to your site multiple times. But isn’t that better than said person never converting, or worse still, buying something from your competitor? Plus, repeat visitors are actually more likely to convert!
You’ve determined your starting point. You’ve carefully allocated bread to your search campaigns and begun growing your budget to encompass everything Google Ads has to offer. It's important to note that you’re not done, yet!
Outside of perpetual optimization—necessary if you want to maximize your paid search budget—there are other platforms you can expand your efforts to. While Bing Ads is the logical next step, you might find that Facebook advertising (lead ads, anyone?) or LinkedIn provides excellent bang for your buck as well.
What are you waiting for? Contact your trusted digital marketing agency today to discuss your marketing plan!
- 2020-04-21 12:50:03
- Search Engine Marketing (SEM)