The budget amount can be anything, there is no compulsion whatsoever. It varies from business to business and ultimately it comes down to what you think is right in order for your ads to perform optimally.
Re: budget[ Edited ]
November 2015 - last edited November 2015
Hi @Bb B,
This is one of the first questions that new advertisers like you usually have in their minds. To tell you truth, it's not that simple to answer . There's no minimum or maximum budget defined for advertising with AdWords. You can start with any amount you want. The majority call it the beauty of the system, but to me, you don't advertise just for the sake of advertising. You have a goal to achieve, a competition to fight against and win. Hence, starting with simply any amount may take you off the track as a beginner. It may be something like walking in the dark groping your roads ahead with the confused and scared hands. You may still be lucky enough to find the right path, and may be Not.
Let me trying guiding you in the right direction so that you can make informed decisions and formulate strategies that keep you focused to and stubborn at your advertising goals.
The first approach is to get performance data from your existing marketing campaigns. How many visitors do you get currently to your website and how many of them are actually converting? For instance, if your current data says you got 40 conversions out of 1000 visitors to your website, your conversion rate is 4% (40/1000x100).
Now take some time to take an estimate of how many relevant/similar visitors/conversions your AdWords advertising plan should aim. Say, you aim 50 more conversions from your advertising with AdWords. So, based on your existing conversion rate i.e. 4%, you will need 1250 (50x100/4) more visitors to your website.
With this data and figure in your hand, head to AdWords Keywords Planner. Make a list of relevant keywords and analyze their average CPC. Now multiply this average CPC with the number clicks/visits you intend to get. For instance, if your a get an estimated average CPC of $0.8, multiply it with 1250 as we discussed in the previous example above.
Your estimated budget in this scenario would be $1000 (1250x0.8).
Using this approach you can get a precise estimate for your budget. But please be aware that it's a estimate, the real scenario will be a bit different.
In the second scenario when you do not have any past marketing performance data to find out the existing conversion percentage, you can still use Keywords planner in the same manner. The only difference here would be your conversion rate to compare against. Take it at 2 to 5% to get your budget estimates. The real adjustments can be done when you run the actual campaigns and accumulate relevant performance data.
All the best.
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