Budgeting and KPIs

Determining what your budget will be will depend a lot on your KPIs (Key Performance Indicators) and what success means to you.

Is your goal

• To get 1000 leads a month?

• Increase revenue by 20% year over year?

• Increase your ROAS by 50% in 1 year?

Your goal should translate into a relatable KPI, usually CPA (cost per acquisition), ROAS (return on ad spend) or sometimes CPC (cost per click) or CPM (cost per 1000 impressions) for brand awareness goals.

You should understand that if you are new to Google Ads and have no data your goals will be different from an already established business.  If you have no data, your goal should be just to break even. At this stage you are just buying data and expanding from there.

Budget Allocation (80/20 Rule)

Your highest performing campaigns will drive the biggest share of revenue. These are usually high intent Mid- to Bottom- of Funnel campaigns. Allocate the majority of your budget to these campaigns (50-60%) as they will bring you the majority of results. 

The rest should go towards retargeting ads for display and top and middle of funnel campaigns. 

Don’t split by network (shopping, display, search, video etc) but by performance. Support your best performing Ads with more budget to reach garner more traffic. 

Conclusion

• Your KPIs will determine ideal budget allocation. Make sure you have them figured out before you decide on anything

• Focus the majority of your budget on the highest performing campaigns. (80% of results are usually driven from 20% of high performing sources, take advantage of these)

• If you have a new account with new data, focus on high intent campaigns search as Search with exact keywords while finding additional keyword opportunities with phrase match campaigns. Just make sure to keep an eye on the search term report for your phrase match campaigns to avoid irrelevant search terms racking up clicks.

• Be prepared to adjust budgets when you see some campaigns outperforming others.

• Save a small portion of your budget for brand and retargeting campaigns.