February 21

How to Create a Profitable Google Ads Campaign with a Small Budget

Google Ads is still the king of the digital marketing world. Over the past 20 years, Google has poured countless hours into perfecting its system and making sure it’s really good at helping searchers find what they’re looking for. That effort has paid off for businesses that want to invest in digital marketing. Google Ads remains one of the most cost-effective tools in your digital marketing kit. And you won’t even need to crack open the piggy bank to create a profitable Google Ads campaign

How do Google Ads budgets work?

Since Google makes money from the ads you run, they’ve also made it easy for businesses of every size to manage their budgets. When you run a Google Ads campaign, you’ll have the chance to set an Average Daily Budget. We’ll cover how much your budget should be in more detail later, but for now, what you need to know is that you control how much you’re spending per day.

Once you’ve set your Average Daily Budget, Google will work within that figure to show your ads to people who are searching and browsing the internet. The amount of money your ads cost will vary, and there are a few different payment methods used by Google. The most common is Cost Per Click (CPC). CPC payments are exactly what they sound like – you pay every time someone clicks on your ads. Across the span of each month, Google will try to help you get as many clicks as possible, up to your Average Daily Budget. 

What is a good budget for a Google Ads campaign?

There’s no one-size-fits-all answer to how much money you should be spending on Google Ads. Your business is unique, and your Google Ads spend is the same. When setting your Average Daily Budget you’ll need to think about: 

  • What keywords you’re targeting
  • Who your customers are
  • The products and services you provide
  • The goals of your ad campaign

To keep it simple, we can say that the more keywords, people and geographic areas you target, the more money you’ll need to spend on your campaign. For example, an electrician who wants to target a popular keyword like “Electrician Brisbane” is going to have to spend more than someone who only wants to target “Air Conditioning Repair.” 

You can use your keyword research as a good rule of thumb for how much money you should be spending on your Google Ads campaign. The formula is simple:

Average Daily Budget = Average CPC * 10

If we take our example from above, we can see that the budget you’d need to target “Electrician Brisbane” is much higher than the amount you’d need to target “Air Conditioning Repair”:

Estimated cost per click for searches in Google Ads Keyword Tool

You’re free to spend as much money on your campaigns as you want, but if you’re spending more money than you’re making, it’s time to expand your keyword research and find search terms that can help you make money. If you want to expand your keyword research then we’ve got some suggestions on great, free tools you can use.

What does a profitable campaign look like?

When we look at profitability, the conversion rate of your ads is probably the most important figure. Conversions are people who’ve clicked on your ad and then gone on to do some other action you wanted, like buying a product or calling you on the phone.

The average conversion rate for Google Ads is 3.17%. Just 3.17% of people who click on an ad will take any further action. To design a profitable campaign, you’re probably going to need to bump that conversion rate up through good creative, strong targeting, and choosing the right keywords. To see what sort of figures are possible, you can have a look at the work we do with Swag Boxers Australia where our campaigns generated a 472% increase in online store sessions!

Tips on how to improve Google Ads profitability

While you’re doing your keyword research and deciding on your budget, we’ve got a few tips to help improve your conversion rates and profitability:

  1. Find your business niche

A small team of electricians probably doesn’t have the marketing budget to pay $17.43 per click on Brisbane’s most competitive industry keywords. If you want to make a profit from your Google Ads campaign, you need to find your niche. Ideally, your ads should be linked to your service with the highest returns. Doing that means you’re driving traffic to a product or service that makes you lots of money and improves campaign profitability. 

  1. Focus your targeting as much as possible

Your ad campaigns won’t do you much good if they show up in front of people who don’t need what you’re offering. The more you refine your targeting, the less money you’ll be spending on clicks that don’t turn into conversions. 

If you want to see higher profits then you should also be taking advantage of Google’s intent-based targeting. Setting up Custom Intent audiences is fairly straightforward, and it means you’re only paying for clicks from people who really want what you’re offering.

  1. Choose the best Google Network for your ads

Google Ads aren’t just limited to the text ads you see when using their search engine. You’ll need to choose the Google Ads Network that suits your business, ads, and campaign goals:

  • Search Network. The Search Network shows text ads on Google Search. Search Ads also display on other websites and third party search engines.
  • Display Network. Google partners with millions of websites all over the world to form the Display Network. The Display Network is mostly for rich media ads (videos and pictures) that show up on third party websites.
  • Shopping Network. One of Google’s newest and most powerful ads, Shopping Ads show up on places like Google and Youtube. Shopping Ads display listings for products without the need to visit your website, filtering out tyre kickers and clicks that won’t become conversions.

The Network you choose has a lot to do with what you’re hoping to achieve. If you’re a service business based in a city like Brisbane, the Search Network is probably your best bet for finding customers. But, if you make money from things like eCommerce, then Shopping Ads could be the more profitable choice.

Boost your Google Ads budget with promotional credits

Running a profitable Google Ads campaign doesn’t need to break the bank. Even when you’re working with a small budget, you can connect with customers who want exactly what you’re offering. If you need a little bit of help with keyword research and sticking to a small budget, the Gordon Digital team would love to hear from you! We’ve been running successful Google Ads campaigns for years now, and as certified Google Partners, we can help new clients access Google’s offer of $500 to put towards their ad campaigns. Get in touch with us and find out how we can help your business!

about the author

Jessica Gordon