Can you run Google Ads with a small budget?

In Episode 46 of Inside Google Ads, host Jyll Saskin Gales answers your burning questions about running Google Ads with a small budget. Discover the minimum amount you need to spend to see results, how to approach budget allocation with your bid strategy, and why patience is key in the early stages of your Google Ads journey. Listen and learn how to determine if your business is ready to invest in Google Ads.

Plus, stay tuned 'til the end of the episode for a new Insider Challenge!

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Transcript

Can you run Google Ads with a small budget? 

Of course! In fact, one of the most popular episodes of this podcast is Episode 23, in which I shared a presentation I gave about how to drive big results with a small budget. Since I know this topic is so vital to many of you, I'm excited to answer three of your questions about how much you need to spend on Google Ads to get great results for your business. 

I'm your host, Jyll Saskin Gales. I spent six years working for big brands at Google, and now I work for you.  

This is Inside Google Ads, Episode 46: Small Budgets.

Our first question comes from Lou K. on LinkedIn, and they ask, have you spoken about low budget accounts? I have clients who insist on trying a very low budget, below $1,000 per month, sometimes below $500 per month, and their belief is they want to see it working before committing to more money. I think you and I know it isn't going to work as well as they hope. Have you navigated this before, or how would you approach it?

Say it with me folks, “$500 a month on Google Ads will not solve your problem.” 

My rule of thumb is you want to spend enough to get a bare minimum of 10 clicks per day. 

And how much is that? You can use Google's Keyword Planner tool for free. Just set up a Google Ads account. You don't need a campaign. And then you can use Keyword Planner to find out how much running ads on your desired keywords might cost. Multiply that by 10. And if you're not prepared to spend that every single day, for at least two months don't run ads.

Why two months? 

Well, it takes time for the system to learn, so it's not uncommon to have very poor results in the beginning. For example, with one of my coaching clients, I helped them completely overhaul their account after taking it over from an incompetent freelancer, in my opinion. But for the first few days after we launched the new campaigns, their cost per click was $28. However, by week two, the cost per click was down to $10, which is in line with what Keyword Planner had predicted.

With another small business owner I started working with and optimizing her campaigns, her ROAS initially went down. Then after a few weeks, it started going up and up and up until her ads were the most profitable they'd ever been by the start of month three. 

I say all this to say you need money to run ads and you need more patience, the less money you have. If you don't have money and patience, don't run ads. Focus on organic growth instead.

How I would navigate this, if a client said they want to see it working before committing more money, is just to advise them that that means they're not a good fit to run ads. I don't want to help someone spend money if I don't think that money is going to drive a good return for them. So, if someone can't spend enough to set them up for the highest possibility of success, it's better they don't spend the money in the first place. 

And you'd be surprised how often when you tell someone you don't want to spend their money, they then start begging you to spend their money. Very strange human psychology, but I digress.

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Our second question today comes from Romerina2687 on YouTube and they say, yeah, but what about the market, the country, the number of competitors? Here in South America, the CPC is way lower in the US. 

This is in response to my first rule of thumb about budget, which is what I would share on social media between, let's say, 2021 and kind of halfway into 2024. And that is that you need to spend at least $20 per day per campaign or don't run ads.

Now, as you might expect by the fact that it's $20, this is a very, we'll call it Canada-, US-, UK-, Australia-, Europe-centric number. So my second rule of thumb is what I mentioned for the first question. You need enough to get at least 10 clicks per day as a bare, bare minimum. 

So if your CPCs in South America are much lower, then more power to you. Keyword Planner is your friend, and budget from there. The good news is your country, industry, competition, all of that is taken into account in your cost per click. So you don't need to do some fancy over-involved analysis to pick a budget. Just Keyword Planner, pick a few keywords, like two to five keywords to start, that's it. Look at the expected CPC range, multiply by 10, and that's your average daily budget.

Do you still feel a bit unsure about whether or not you should run Google Ads and what it'll take to get them up and running? Book a call with me. We can discuss it together. Just because you book a Google Ads coaching call with me, it doesn't mean you need to commit to running Google Ads. In fact, I've had dozens of clients over the years who book a call with me and then I convince them not to run ads or to pause their already-running ads because I don't think ads will be beneficial to their business. In these calls, with the client's permission, we either shift to focusing on organic growth strategies instead, like getting started with social media marketing, or we stop the meeting halfway through and I let them save that time for the future when they are ready to run ads. Or, if they really insist on running ads, then of course I'll help them do that in the best way possible, but caution them that I don't think it'll work well. 

Either way, I promise that when you book a call with me, you will get personalized, unbiased Google Ads advice. You can learn more about booking a Google Ads coaching with me on my website or follow the link in the episode description. 

Our final question today comes from sumahomes-i4i  on YouTube and they say, wonderful. Can you guide me? How are you speaking? Are you using two monitors to read and talk? I wanted your help. Anyway, how much minimum Target ROAS budget? 

I love the combination here. 

So for the record, when I record this podcast, I have notes up in front of me. Not a full script, just some bullet points I want to make sure I touch on. And that's why if you're watching this right now, rather than listening, I'm sometimes looking down, and sometimes looking straight to camera. That's how you can tell if I'm ad-libbing or reading my notes. 

But your Google Ads-related question, how much minimum Target ROAS budget? Target ROAS is a Smart Bidding strategy that focuses not just on driving conversions, but driving more valuable conversions. And even more than that, conversions that will get you your desired ROAS, your desired return on investment.

It's not about how much budget, but actually how many conversions, because conversions are the data the Target ROAS needs to work. Ideally, you'll have two to three conversions a day to use a Target ROAS bid strategy. So 60 to 90 conversions in a month. I've seen it work with 15 conversions in a month, but that's the client that took a bit of time where ROAS went down before it went up. And then I've also seen other accounts with 10 to 20 conversions a month, and they just can't get Target ROAS working.

Basically, you need a certain amount of data for it to learn. So if you have a lower budget, it'll take a lot longer to get those conversions in and a lot longer for it to learn. And you may run out of patience or budget before then. 

One great way to help get around this is by using micro-conversions, tracking the things that happened before conversion as a way to feed your Smart Bidding algorithm. I talked all about this in Episode 39 of this podcast, if you missed that.

The moral of the story is this: you can absolutely run Google Ads profitably with a small budget, as long as that budget is big enough to get at least 10 clicks per day. That's not a guarantee you'll get good results, but I'm just saying it's absolutely possible, and even more than possible, it's likely. If CPCs in your industry are $2, 10 clicks a day, $20 a day, that should be easy.

If spending $20 a day, which is $600 a month, on ads does not sound easy to you, then do not run ads. You can't afford to, and that's okay.

Now let's say CPCs in your industry are $20. Now you're talking $200 a day. That might be harder, but again, if you can't afford it, it's better to not run ads at all than to spend too little, see no results, think ads don't work, and waste your money. When really, it was your business that's not ready to run ads and not the other way around.

Because many businesses, especially small businesses or new businesses, are just not ready to run ads. And that's okay. 

Today's Insider Challenge is this. A potential client reaches out to you who has never run Google Ads before. They want to run Google Ads for their business. It's a relatively new business, a year old or so, and they sell bespoke children's clothing. What are some questions you would ask this business owner to determine whether or not they should run Google Ads?

The beauty of the Insider Challenge is there's no right or wrong answer, just an opportunity to stretch your brain on real life Google Ads problem solving.

Last Episode's Challenge was this.You're auditing an account that has 100 Broad Match keywords in one campaign and the campaign is limited by budget. However, it's also meeting its performance goal, which is an $80 CPA. Do you make changes? If so, what? Or do you leave it alone? 

I am a big proponent of “if it ain't broke, don't fix it.” In this circumstance, I would probably still tweak it. More importantly, I'm not going to ditch Broad Match. Automation is an end game and we've got automation working well for us. So let's help the automation, work with it. 

The campaign is limited by budget and being limited by budget hurts the automation's ability to perform. It's like trying to run a race with a cast on. It's just, you're not going to perform as well as you could without that cast. To help the automation, I would want to shrink our targeting so that our budget more closely matches the opportunity. 

First, I would check the bid strategy. Notice how I didn't tell you a bid strategy we were using in this challenge? Since our goal is $80 CPA and we are hitting our goal, I would start by switching to Target CPA if we're not already there. I would make the target a bit more aggressive than our goal, perhaps $75 or $70 to drive more efficiency, which will lessen our reach. 

If we're still very limited by budget, which I could also check by looking at Search Impression Share lost due to budget, then I would consider either targeting a smaller geographic area or pausing some keywords. A hundred Broad Match keywords in one campaign is probably too many unless we're spending thousands of dollars a day.

I would review the Search Terms Report, adding the column for keyword to check which search terms are matching to which keywords, and what's driving performance. However, I wouldn't make some huge sweep and pause half the keywords at once, because I'm going to guess there would be a lot of hidden search terms here driving results too, and we don't want to accidentally cut all that off as well. I would aim to identify maybe 20 keywords to pause at first and see how that, in combination with a tighter CPA target, goes. 

If after a few days or a week we're still severely limited by budget, I would either, well, add more budget if it's performing so well, or follow the same steps again. Bring the CPA slightly down, pause 10 to 20 more keywords, wait and see. 

What about you? What would your approach be? Leave it alone since it's meeting your goals or optimize?

I'm Jyll Saskin Gales and I'll see you next time Inside Google Ads.