At jSinger Marketing, we have managed Google AdWords campaigns for dozens of clients ranging from $100-$15,000 per month. That’s a huge range. And every time a new client jumps on board, I get the same question: how much should I spend on my Google AdWords budget?
For most businesses, I have a simple answer: I recommend 6% of your net profit over 12 months.
So, if your business brings in $500,000 per year, and $200,000 in profit, $12,000 should be your AdWords budget for the year. I believe this to be a conservative number, yet I understand that Google ads are often a new venture for the advertiser, and there can be a hesitance to take the plunge.
If you can’t jump in with 6% of your profit, however, I don’t believe you were serious about advertising on the Internet. Ironically, there is a correlation between people who are hesitant about Google ads and those who spend on traditional direct-mail or print ads. In those cases, companies are missing out on web search traffic, which is typically comprised of people closer to the buying stage of the cycle.
At jSinger, we have a history of sales, calls and email leads for all types of business in the first month. We think those early results are encouraging, and give excitement and optimism. If you can break even, you typically have done a great job. The second month, if properly managed, should get even better results. That is because campaigns can be tweaked as they go, eliminating poor quality keywords and searches, and focusing on your best audience.