How much should I spend with AdWords?

When it comes to calculating how much of your marketing dollars you should invest into AdWords, there are are a number of factors to consider. Some of the main ones are:

How competitive is your industry?

As Google AdWords is an auction-bidding system (where the higher you’re willing to pay for each click, the higher your ad will appear on the Google search page), the amount of competition in your industry is by far the most important factor when trying to decide on how much you should invest. For example, if you were offering a niche product such as green mobile phone covers, you’d probably find that your CPC (‘Cost-per-click’) is only about $0.30 meaning you could invest as little as $5 per day and still receive a significant amount of clicks. However with highly competitive industries such as b2b products/services, or finance products, CPCs can be as high as $25 per click – meaning you’d need to invest at least $100-200 per day in order for AdWords to be effective.

How much extra work can my business handle?

When set up correctly, Google AdWords can be an extremely effective marketing channel, bringing in 10′s of new leads in less than a day. Before sending massive amounts of traffic through to your website, you want to ensure that you’re able to service all of your new potential customers and not have to turn anyone way (which will create a bad experience for people and may reflect badly on your business).

What can I afford to spend?

Google AdWords can be a highly effective marketing channel with the ability to generate massive ROI for your business, however you shouldn’t put a second mortgage out on the family home and throw all of your money into AdWords hoping this will happen. As with all marketing channels, AdWords often requires a test & learn phase which may mean that your first month of advertising generates no positive return at all. Usually after the first month, your AdWords expert will have sufficient data to be able to take a look at what has worked, what hasn’t, and then fine tune your campaign from there in order to generate that positive ROI.

To get the best idea on what you should be spending with Google AdWords, we recommend you speak to one of our qualified experts on 02 9654 3323, or send us an email using our contact form.