Understanding your Google Ads daily budget


July 31, 2023

Does deciding on your Ads budget make you break into a cold sweat? We get it—it can be overwhelming sometimes 🥴🥴 Your Google Ads budget depends on your company’s overall marketing budget, as well as the average value of each of your sales.

How does Google Ads fit into my marketing strategy?

Are Google Ads one of the main players or just a sidekick in your marketing game? Assess all of your marketing channels and see where paid ads fit in.

What are my competitors spending?

Use a keyword tool like SEMrush or Similar Web to learn how your competitors are investing in Google Ads. Identify their ranking keywords and improve your ad copy with persuasive language to outperform them.

Remember to double-check the spending analysis as it can be inaccurate.

For example, if you’re spending $3,000 but your analysis tool shows $1,000, and your competitor spends $3,000, assume that your competitor may be spending up to $9,000 per month.

How much are the costs-per-click for the keywords I want?

Use Google Ads Planner to find the most relevant keywords that actually have enough people searching for them within the location you want to target.

You can even input your likely conversion rate and average order value to get a sense of your potential return on ad spend (ROAS).

Don’t base your budget solely on keyword costs—it’s not the be-all-end-all. Your target audience, ad copy, landing page design, and overall marketing strategy are just as important to the campaign’s success.

Which KPI matters most?

A KPI is not the same as a campaign objective. KPIs are the metrics, and the campaign objective is the goal.

For example, if your goal is to increase website traffic, you might focus on KPIs such as click-through rates and cost-per-click. But if your goal is to drive sales or leads, you might focus on KPIs such as conversion rates.

Setting your daily budget

Setting a daily budget ensures that you’ll never spend more than you can afford to on the platform. Average daily budget is the average amount that you set for each ad campaign on a per-day basis. It specifies how much you are roughly comfortable spending each day over the course of the month.

A month in Google Ad terms is 30.4 days

So Daily budget = Monthly budget / 30.4

While your daily budget may fluctuate, the campaign’s total spend will never exceed your overall budget.

Create a daily budget for each of your campaigns. Your Google Ads budget depends on your company’s overall marketing budget, as well as the average value of each of your sales.

Use Google’s suggested bids as a guide. For example, if Google suggests a bid of $10 on a keyword for a product that only costs $20, you’d have to convert 50% of the traffic to that page in order to break even.

Calculate cost per conversion

CPC is the percentage of people who converted after clicking each ad.

You’ll want to make sure you get a positive ROI.

For example: a campaign generates an average cost per conversion of $5. If your average sale is worth $20, you’d earn a significant return on investment (ROI). But if your average sale is $5, you’d lose money because of the cost of goods sold.

As you continue to optimise your campaigns, you can remove those keywords that are not generating enough revenue for you; and increase ROI over time.

Once you reach this point, the actual budget itself is less of a determinant because for every dollar you spend, you’ll be getting more back. So the campaign is paying for itself with the sales it generates.


Google Ads (especially Search and PerformanceMax campaigns) are best for driving sales conversions.


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