Google Ads budget: 10 calculation factors

How much does Google Ads cost? This is undoubtedly the first question that all business leaders ask themselves before launching their first ad campaigns. First, know that there is no universal cost for Google Ads campaigns: each business must target the ideal budget for an optimal return on investment.

To calculate this budget, we have targeted 10 factors to consider.

1. Main KPI: your sales expectations

To calculate your Google Ads budget, it all starts with evaluating your goals. Key performance indicators (KPIs) are quantifiable actions that allow a company to assess its performance. In the context of Google Ads advertising campaigns, a KPI is an objective that, if achieved, allows us to consider the campaigns a success. For example, you might want 600 new customer contacts (calls or emails) in 2023 through your Google Ads campaigns.

2. Ad coverage: number of campaigns & display channels

It may seem obvious, but it's important to remember that the more you want to be seen, whether on one or more channels, the higher the Google Ads budget should be.

Let's think of a simple Google Search campaign: this requires less budget than a large-scale strategy including, for example, several campaigns on the Search, Shopping, Display and Performance Max channels combined.

Good to know: Google Search campaigns should be your first step when you want to advertise online: these are an excellent basis for positioning yourself in your content, your messages, and even your other types of campaigns.

3. Conversion rate: a prediction of performance

The conversion rate corresponds to the number of users who take a concrete and profitable action according to your objectives. Two conversion rates are important in calculating your Google Ads budget:  

To learn more about conversion configuration, read our article How to set up & track Google Ads conversions.

4. CPC by market: the restrictions of your industry

What terms and phrases do your target customers use to find businesses like yours on the web? In Google Ads, the answer to this question is essential – and greatly impacts your advertising budget.  

As seen in the following image, it would be more expensive to advertise as a life insurance broker (average cost per click (CPC) of $3.72) than as a car dealership (average cost per click (CPC) of $1.43).

Source: Wordstream

5. Keyword competition: the strategy to adopt

What keywords are your competitors ranking for? Do you want to: 

1. try to beat them on the same high CPC keywords? (e.g.: “exterminator”); or
2. select less expensive but highly relevant keywords that fewer specialists have targeted (e.g.: “kill an ant nest in a wall”)?

Your choice will be decisive in calculating your Google Ads budget – and for the content of your campaign landing pages!

6. Search volumes: your business’s specialization

The level of specialization of your business impacts your advertising budget. 

The keywords to advertise a niche service with little competition in a small territory are likely to be more affordable, and a lower budget ($600 to $1000 per month) could be enough to cover 100% of user searches. For a popular service with lots of competitors, that same budget might not be enough.

7. Territories covered: the scope of visibility

Of course, your Google Ads budget will be higher if you want to launch a broader campaign (Canada, the United States) rather than a local campaign (Quebec or 50 km around your place of business).

The competition on the targeted keywords may also be different in Canada than in the United States, as well as the keywords themselves: indeed, your target customers may not use the same words or expressions to search for your products or services.

But well beyond the keywords, breaking into new geographic markets simply requires a budget that matches your ambitions.

8. Campaign language: 2 strategies in 1  

One could mistakenly think that a bilingual campaign is only a translation of the selected keywords. However, such a strategy must be thought out by considering each of the languages ​​individually since the expectations, the culture and the public are completely different.

What should be remembered is that each campaign, and therefore each language, requires an appropriate minimum budget.

9. Diffusion in peak periods: maximizing results

Your Google Ads budget should be seasonal. For example, a landscaping company benefits from spending more of its budget in the spring, when its customers are ready to plan their landscaping for the summer.

Your experience and your knowledge of the market, but also the analysis of monthly search volumes, can indicate how to distribute your advertising budget. The result? More sales for you, at the right time.

10. Digital maturity: step-by-step advertising

In closing, the maturity of your business in terms of digital advertising campaigns weighs in the balance. If you are just starting your campaigns, it is entirely possible to start small, analyze the results and set more ambitious goals later. We're here to provide you with guidance!

Entrust your budget to an expert so you don’t waste a dime 

Once your advertising budget has been established, there’s still a lot to do: to seize all opportunities, avoid costly mistakes and maximize your sales, be sure to entrust your Google Ads campaigns to digital advertising specialists. Of course, their fees should be included in your investment. But you’ll be rewarded quadruple on your results!