When it comes to Google Ads, the most common question people ask is: “How much should I spend?” And that’s a great question. Whether you’re dipping your toes into online advertising for the first time or you’ve run ads before, it’s tough to figure out the right budget. Too little, and you might not see any results. Too much, and you could be wasting money on ineffective campaigns.
But here’s the thing — Google Ads isn’t just about how much you spend. It’s about how well you plan, and more importantly, how you budget over the long haul. In this guide, we’re going to walk you through how to think about your Google Ads budget for the long term. You’ll get tips on planning for growth, forecasting, and making data-driven adjustments that’ll help you get the best bang for your buck.
Thinking About Your Budget in Terms of Months or Years
If you’ve ever thought, “I’ll just try this for a month and see how it goes,” you might want to reconsider. Google Ads doesn’t always deliver instant results. It takes time to optimize your campaigns, test different strategies, and fine-tune your targeting.
That’s why it’s better to think about your budget over a longer period — say, 6-12 months or even longer. This gives you enough runway to figure out what works and what doesn’t, without burning through your budget too quickly.
When you think in terms of months or years, you’ll also find it easier to manage your expectations. Instead of expecting immediate results, you’ll be more focused on gradual improvements, better targeting, and optimizing your cost per click (CPC) and cost per acquisition (CPA) over time.
Long-term Google Ads Budgeting Strategy
Now that you’re thinking long-term, let’s dive into some strategies that’ll help you manage your ad spend effectively over the coming months and years.
Forecasting Ad Spend
Before you set a budget, it’s important to forecast what you’ll be spending. A good starting point is understanding how much you’ll need to spend to achieve your desired results. For instance, if your goal is to generate 100 new customers a month and you know your average CPA is $50, you can estimate that you’ll need to spend around $5,000 a month.
Of course, this is just an example, and your numbers will vary. But forecasting gives you a rough idea of what to expect in terms of spend, and it helps you avoid any nasty surprises down the road.
Planning for Growth
Once you’ve got your initial forecast, it’s time to think about growth. As your business grows, your ad spend will likely need to grow too. You’ll be targeting more keywords, running more campaigns, and hopefully attracting more customers. By planning for this growth, you’ll be able to scale your Google Ads budget gradually, without overextending yourself.
Reinvesting Profits
One of the smartest things you can do with Google Ads is reinvest your profits back into your campaigns. Let’s say you run a successful campaign that generates a 3x return on investment (ROI). Instead of pocketing all the profits, consider reinvesting a portion of that money back into your ads. This will allow you to scale up your campaigns and reach even more customers over time.
Importance of Long-Term Budget Planning
So why is long-term planning so important when it comes to Google Ads? Simple: it sets you up for sustained success.
Why Long-Term Planning Matters
Long-term planning helps you avoid common pitfalls like overspending on short-term campaigns or underestimating the amount you’ll need to see results. When you budget for the long term, you’re also more likely to stay consistent with your ads. This consistency is key to building momentum and generating a steady stream of traffic and conversions.
Risks of Short-Term Budgeting
On the flip side, short-term budgeting can leave you vulnerable to inconsistent results. You might run a campaign for a month, not see the results you were hoping for, and then quit. The problem with this approach is that you’re not giving your campaigns enough time to perform. Google Ads works best when you allow it time to collect data, optimize your bids, and improve your ad quality.
Forecasting Future Ad Spend
It’s not enough to simply set a budget and forget about it. You’ll need to regularly forecast your future ad spend and make adjustments as needed.
Analyzing Current Performance
Start by analyzing your current performance. How much are you spending right now, and what kind of results are you getting? Are there campaigns that are underperforming, or keywords that are driving a lot of traffic but not enough conversions? By taking a close look at your performance, you can start to identify trends and areas where you might need to increase or decrease your budget.
Estimating Future Trends
Next, think about how things might change in the future. Are you planning to launch new products or services? Are you expanding into new markets? These factors can have a big impact on your ad spend, so it’s important to account for them when forecasting your budget.
Setting Realistic Budget Growth
As your business grows, your ad budget should grow with it. But it’s important to set realistic goals. Don’t double your budget overnight unless you’re confident that your campaigns can handle the increased spend. Instead, aim for gradual, sustainable growth — for example, increasing your budget by 10-20% every few months.
Accounting for Inflation
Inflation doesn’t just affect the price of groceries — it can also impact your Google Ads budget.
Impact of Inflation on Ad Spend
As inflation rises, the cost of running Google Ads can increase too. This is especially true if you’re in a competitive industry where ad costs are already high. That’s why it’s important to factor inflation into your long-term budgeting strategy.
Industry-Specific Costs
Different industries experience inflation in different ways. For example, industries like finance and law tend to have higher CPCs, while industries like retail or hospitality may have lower costs. Keep this in mind when planning your long-term budget.
Planning for Business Growth
When you’re planning for business growth, it’s important to think about how your ad spend will scale over time.
Scaling Your Google Ads Budget
As your business expands, you’ll likely need to run more campaigns, target more keywords, and invest in new ad formats like video or display ads. All of this will require additional budget, so make sure you’re planning for these expenses ahead of time.
Budgeting for New Campaigns
If you’re launching a new product or service, you’ll need to set aside extra budget for those campaigns. Keep in mind that new campaigns often require more spend upfront as you test different strategies and find what works.
Reinvesting Profits
As we mentioned earlier, reinvesting your profits back into your campaigns is a great way to scale your Google Ads budget over time.
Value of Reinvestment
Reinvestment allows you to grow your campaigns without having to dip into your personal or business savings. It’s a sustainable way to scale up your ad spend while ensuring that your campaigns remain profitable.
Scaling Based on Return on Investment
When reinvesting, it’s important to scale based on your ROI. If a campaign is delivering strong results, consider increasing your budget for that campaign. On the other hand, if a campaign isn’t performing well, it might be time to cut your losses and reinvest that budget elsewhere.
Adjusting Your Budget Over Time
Finally, it’s important to regularly review and adjust your Google Ads budget based on performance data.
Making Data-Driven Adjustments
One of the biggest advantages of Google Ads is that it provides you with tons of data. Use this data to make informed decisions about where to allocate your budget. For example, if you notice that one campaign is consistently outperforming the others, consider shifting more of your budget toward that campaign.
Regular Performance Reviews
Set a schedule for regular performance reviews — whether it’s monthly, quarterly, or annually. This will help you stay on top of your ad spend and ensure that you’re getting the best possible results from your campaigns.
Bottom Line
Google Ads can be a powerful tool for growing your business, but only if you plan your budget wisely. By thinking long-term, forecasting future trends, and regularly adjusting your budget based on performance data, you can set yourself up for success.
When planning your ads budget, always remember to focus on your cost per acquisition and other key metrics. And don’t forget to reinvest your profits to help your campaigns scale over time.
FAQs
How much should I budget for my first Google Ads campaign?
There’s no one-size-fits-all answer, but a good starting point is to calculate how much you’re willing to spend per customer and work backward from there.
Can I run Google Ads on a small budget?
Yes! Google Ads can work with any budget, but keep in mind that smaller budgets may require more time to see significant results.
How do I know if my Google Ads budget is too high or too low?
Monitor your cost per acquisition (CPA). If your CPA is too high, you may need to lower your budget or adjust your campaigns for better efficiency.
What’s the best way to scale my Google Ads budget?
The best way is to reinvest your profits into the campaigns that are delivering the highest ROI.
How often should I adjust my Google Ads budget?
It’s a good idea to review your budget at least once a month and make adjustments based on performance data.
