When it comes to paid advertising, there are a lot of things you need to consider where you want to run your ads, how much you should spend on them, what types of ads you should run, and more.
Today, I want to answer a specific question that focuses on how much budget you need per campaign. After all, it can be quite straightforward to try and figure out the minimum you can spend across all your campaigns, but if you are trying to niche down and figure out how much to spend on one specific campaign, it gets a bit tricky. Luckily, I run my own paid ads agency, Snowball Creations, so I have a pretty good idea of what I’m talking about.
There's not just one answer
If you came into this post wanting a very clear-cut answer, prepare to be disappointed. In reality, your budget per campaign will depend on a variety of factors, and that’s what today’s post is all about: helping you figure out which factors affect your budget per campaign. This depends on so many things, which we’ll go through in detail soon.
But just take a minute to think about it – even the platforms you run ads on will affect your budget. Your Google Ads budget will likely be different from your Facebook Ads budget, which will again be different from your LinkedIn Ads budget. Of course, there is a minimum ad spend you should be aiming for, which you can read about here.
Not to mention the fact that there are many other variables that can affect your ad budget, such as whether you are sending people to a landing page or your website, whether you have a big full-page ad or a smaller ad, and what your daily budget is, to name a few. But there are also a lot of other factors that affect your monthly budget, which we’ll dive into next.
Factors that affect your budget
Now that we’ve got all the small talk out of the way, it’s time to talk about all the nitty gritty details that will determine your monthly budget.
1. Your cost-per-click
Your cost per click, or CPC, refers to how much you will pay for each click that you get from an ad. This is determined by various factors, such as:
- Your quality score
- Your product’s price point
- Your competition
Naturally, if you have a very high cost per click, you need to have a bigger budget as well to ensure that you can afford multiple clicks. You can set up all this information in your Google Ads account as well as other ad platform accounts so that you get a clear picture of your ads’ performance.
2. The speed of results needed
We often want results as soon as possible, but that’s not always possible with paid ads. Generally, you need to run your ads for a while before you get the info you want to know what works and what doesn’t work.
That’s because it takes a while to get the data you need. However, the more money you spend, the more clicks you get, and thus the more data you get. This will in turn allow you to get results much sooner. In other words, if you need to urgently fast-track your results, spending more money on your paid ads can help.
Also, be sure to think about which platforms and campaigns give you the most information. For example, if Google search ads are bringing in the most customers, you should spend a big portion of your Google Ads fees on this Google Ads campaign.
3. Your competition
In case you’re not sure how paid ads work when it comes to platforms like Google, you’re essentially bidding on clicks. The higher your bid, the better your chances are of someone clicking on your ad.
As you can imagine, this is determined by your competition to a certain extent. If there are loads of people trying to snatch a spot for a certain search, you need to have a higher bid (and therefore a higher budget) in order to have a fighting chance.
If it’s a very niche and rare search though, you might get away with a smaller budget since your competition will likely be less, and your target audience will be more likely to find you via your digital marketing efforts.
4. Your quality score
Platforms like Google will also give you a quality score on a scale of one to ten. This is based on a variety of factors like . . .
- Your CPC
- Your expected CTR
- Your ad relevance
The higher your quality score, the better your chances are of snagging a good ad spot, but if you have a low quality score, you may need to spend some more money to try and boost your ad rank.
You need to make sure that your campaigns are satisfying your users’ search intent if you want to have a good quality score. Do your keyword research, monitor your campaign performance, and look at your average daily budget until you know your ads inside and out.
5. Your account's age
If you have a new account and you’ve never run ads before, you need to accept the fact that your ads likely won’t perform well unless you have a significant budget allocated to your campaigns.
Again, this comes back to what I mentioned earlier about needing data to run effective ads. If you have a newborn account, you won’t have any data to work with, and a smaller budget could mean that you will need to wait months to have any significant results. A higher starting budget, on the other hand, will give you enough data to start effectively optimising your ads sooner rather than later.
In conclusion
While this post may not have given you a very clear and direct answer of how much you should spend per ad campaign, it hopefully gave you some insight into how you can work this out for yourself based on the numbers mentioned above.
And of course, if you are still unsure, fill in the form below to get in touch with my paid ads agency and we’ll crunch the numbers for you!