How much money should I invest in Google Ads if just starting out?

Creative Brackets
Creative Brackets
19/05/2020   /   0

If you are starting a new business, making your first website, or trying out online advertising, but you are not sure about how much money to invest, there are several things you should consider.

You must determine which criteria are you calculating the return on investment. This depends on whether you are advertising services or products, and on which platforms and channels you wish to do it.

If you have an online shop, calculating the return on investment is done in the following way:

ROI of the product = (( Income - Product price ) / Product cost ) * 100%

If you are advertising services, return on investment is calculated in the following way:

ROI = (( Total income - Total expenses ) / Advertising expenses ) * 100%

If it is necessary to do a simpler calculation for advertisement payoff, you can do it by calculating Cost Per Acquisition.

The Cost Per Acquisition is calculated in the following way:

CPA = Campaign cost / Sales

Cost Per Acquisition, CPA, should not be greater than the profit made through that particular acquisition, otherwise, your campaign is not paying off.

Now that you know how to look at the basic values, we need to look at this process if you are advertising on multiple channels.

When just starting, you probably do not have a clearly defined budget allocation plan. In short, the more channels you have, the more your total investment must be split apart.

In cooperation with you, depending on the industry, prior experience, and an agreement we make together, we define the primary plan for budget allocation for different platforms. Most new brands use social media to advertise, alongside Google, so the new budget plan is developed with that in mind.

In the following period, usually one month, all advertisement channels and Google Ads budgets are monitored and modified based on results.

Analytics monitoring and campaign optimization are very important for the return on investment to be as greater as possible.

The goal of this test period is to determine exact budget allocation by platforms, products, or services, and planning the budget increase so we got the most from each channel.