What should your Google Ads budget be next year?

1. What should your Google Ads What should your Google Ads budget be next year? budget be next year?

2. Before the turn of the year, most companies do everything to get the most out of Christmas shopping and seasonal shopping. In addition, they put together their Google Ads budget for next year. It's not surprising that despite the success of Facebook ads, Google still accounts for over 30% of all digital ad spend . But how do you choose the right Google ad budget for your business? For many companies, this question seems quite simple. It's just simple math, right? If 30% of digital marketing goes to Google Ads, why not just take the digital marketing budget and allocate a third to Google Ads? Despite the simplicity of the method described above, after a little digging it quickly becomes clear that that type of equation is not the best way to figure out your budget. If your goal is just to come up with a number, that works, but if your goal is to create a Google Ads budget that delivers results, you need to dig a little deeper. That said, choosing the right Google Ads budget for your business is pretty easy as long as you know what you're doing. In this article, I will help you with that. With a little analysis and a few calculations, choosing a meaningful Google Ads budget for next year will be easy!

3. Table of Table of contents contents 01 01 Why your revenue and ROI goals matter 02 02 Define your customers 03 03 Budget for your personas

4. 01 01 Why your revenue and Why your revenue and ROI goals matter ROI goals matter

5. Budgeting based on your expected costs is like saying, "This is how much money I want to give Google." It's easy to spend money on Google ads. Making money from Google Ads requires a lot more thought, planning and effort. Unfortunately, only about half of the companies we've been in contact with use their financial goals when planning their Google Ads budget. But that's actually good news for you. When almost everyone is doing it wrong while you are doing it right, you can get much better results than your competition. Before we go over the details of how to create your Google Ads budget, you need to make sure your revenue and ROAS goals for Google Ads are clear. You may need to do some research beforehand, as your budget won't be very effective if you don't know what your goals are.

6. 02 02 Define your customers Define your customers

7. If you're wondering why we're talking about my clients in a budgeting blog post, don't worry. You will get the point right away. The secret to creating an effective Google Ads budget is actually your buyer personas . Who are you selling to? To explain why your buyer personas are the secret to your Google ad budget, let's use a little hypothetical scenario. Let's imagine that you are the marketing manager for SWEPARTS. SWEPARTS sells the world's best spare parts for mobile phones. In fact, your spare parts are so good that your average customer lifetime value (LTV) is 24,000. When planning next year's Google ad budget, you start by reviewing the year's results and realize you blew over 40% of your budget on a campaign that produced less than 1% of your sales. Since you spent an average of 4,000 per sale this year on Google Ads, you've just discovered a giant hole, haven't you? If 40% of your ad spend produces 1% of your sales, why not cut your Google ad budget by 40%? What a thing! But you've read this article, so before you make any final decisions, you decide to take a closer look at the data. You know that, SWEPARTS has three different buyer personas, each with its own LTV:

8. When you evaluate the embarrassingly expensive Google campaign, you suddenly realize something: it is the only campaign that brings "Jakob" sales. It only represents 1% of your sales, but the campaign accounts for 59% of your Google Ads revenue. Getting rid of that campaign would have reduced your ad spend by 41% and you would have lost large chunks of your Google ad revenue. Do you see why your buyer personas are such an important part of your Google ad budget? Different personas respond to different types of ads and campaigns. If you don't know which customers are coming from which campaigns (and how much it costs to produce a new sale from each type of persona), you'll create a budget that's optimized for the wrong things.

9. 03 03 Budget for your personas Budget for your personas

10. A good Google Ads budget starts with your revenue and profit goals, but to figure out how to achieve those goals, you need to understand your different buyer personas and what you can afford to spend to get a new customer from each persona. With these calculations at hand, everything becomes much clearer. You can spend more than 200 times more to acquire a new "Jakob" customer than you can on a "Khalil" - while maintaining a higher profit margin. If your Google Ads budget decisions were based on your average acquisition cost of 4,000, you would make very different decisions. But when you outline your different buyer personas, it's suddenly obvious that this isn't the right way to approach things. Unfortunately, buyer personas are far too rarely used, especially when it comes to creating marketing budgets. Most marketers know what buyer personas are, but only 30% use them effectively. When you base your Google ad budget on arbitrary numbers or percentages, you're missing the bigger picture. Your Google ad budget must be directly tied to your customers and what they are worth. Otherwise, you're just guessing and it's not a very effective way to market your business.

11. Conclusion Conclusion

12. Can you pick an arbitrary Google Ads budget and just run with it? Sure, but most of the time you're doing more harm than good. If you really want to get the most out of your Google Ads campaigns, you need to figure out what your goals are and then invest some time and effort in understanding your different buyer personas. Once you have that information at hand, it's actually easy to create a meaningful Google Ads budget. Instead of pulling your budget out of a hat, create an intentional budget that helps your business grow. By the way, if you need a little extra help, why not contact us here! We'll help you figure out how to get the most out of your Google ads next year.

13. Thanks! Thanks! Do you have any questions? info@affordit.co.nz 0800 233 674 affordit.co.nz