Google Ads
For E-Commerce

The simple answer is to spend as much as you can afford. The detailed answer is to determine your budget by carefully weighing up your potential investment against your Return On Ad Spend (the revenue you earn for each dollar spent on Google Ads) and operation costs.

The process of determining your budget should consist of asking yourself several important questions, including:

What should be my minimum budget?

How much would you be willing to pay to advertise with Google Ads if your efforts only broke even, or if you could not reliably measure your results? Whatever number you come up with should be your minimum budget.

What return on ad spend would I like to achieve?

What return on ad spend do you actually want or need from your Google ads? For example, if you are selling products, then how much do you need to make in revenue for every dollar, or every $100 that you spend on advertising?

What is my current return on ad spend?

If you find that the return on ad spend you need is much higher than the return on ad spend you're currently receiving, then your Google Ads may not be profitable. This means that you don’t have a lot of scope to increase your budget. On the other hand, if the return on ad spend you need is lower than the return on ad spend you're getting, then it is likely you can comfortably increase your budget.

One way to test the performance of a higher budget, especially if you're an e-commerce business, is by increasing your present investment and analysing the resulting return on ad spend. If the return on ad spend is considerably lower when you have a higher budget, then it might mean that the search demand for your products is not high enough to justify an increased budget.

Should my budget fluctuate seasonally?

Depending on the time of year, you may discover that you should increase or lower your budget. A good example of this is pre-Christmas shopping sprees, versus off-season periods. It’s important to scale your budget appropriately so it can successfully meet high search demands, resulting in a larger budget in some months and a smaller budget in other months.

How much can I scale my budget without my operations breaking?

Your operations should be sustainable regardless of the budget you set. While this is generally not an issue for e-commerce businesses, it is an essential consideration for service-based businesses. After all, you need to have the capacity to turn leads into proposals and a team behind you that can service those potential clients. This means that if you are a service-based business, you will need to consider how many leads you can comfortably handle before committing to a specific Google Ads budget.

It’s common to experience the feeling that your competitors' ads are appearing more than your own. There are several reasons this could happen. Often, it can be a case of your competitors running a larger advertising budget than you. It may also be that Google Ads is intentionally not showing you your ads as it is effectively targeting the people that are most likely to convert when visiting your website.

Google relies on highly sophisticated systems and will learn from your browsing behaviour over time. If you look at your ads or click on them, but do not purchase anything on your website or convert through contact forms, then it is less likely to show you your ads in the future. Because of this, the best way to measure whether Google is showing your ads is by reviewing the impressions count in the Google Ads Campaigns themselves.

The other benefits of monitoring through Google Ads Campaigns

Google Ads Campaigns also allow you to monitor metrics for how your ads impressions compare with other competitors on average and whether other competitors typically show above you or below you in the search results. Rather than analysing how often your ads are appearing, it’s important to always go by the results in terms of return on ad spend and revenue to understand the effectiveness of your campaigns.

When you allocate your budget to Google Ads, it's essential that you don’t just divide the budget equally between different Google Ads channels. Instead, you should stack your budget into the area that will perform best. This will improve your return on ad spend and revenue made in your business, thus reducing wastage on search terms or channels that are less effective at turning into sales.

A simple Google Ads strategy includes working out what the return on ad spend is in different channels (for example, comparing shopping channels to text search, to display, to Youtube) and seeing what the return and ads band is in each. You would then increase or decrease the channel’s budget based on the return on ad spend.

A more complex strategy may include multiple campaigns within each channel. This means that, for example, your shopping campaigns may be split into different groups of inventory that have different strategic benefits to your business. The amount of budget that should go into each grouping depends not only on the return on ad spend that you get from that grouping, but also on the strategic importance of that group.

Yes, it is possible to increase your return on ad spend. This can be achieved by resolving bidding issues on your account and refining the selection of inventory and search terms that are selected by Google. It can also be achieved by refining your ads over time. This can include improving the inventory in the merchant centre, search ads, images for display apps, and audiences, such as remarketing audiences.

You can also improve your return on ad spend by taking advantage of seasonal fluctuations in search demand. This is accomplished by increasing your budget during high-demand peak periods. However, it's important that you have an agency such as The Quantified Web monitoring your search terms all the time to reliably determine when those peak periods are and to increase the budget or exposure to certain search terms accordingly.

Excessive spending relative to your search demand and competition can also erode your return on ad spend. If this is the case, you can increase your return on ad spend by decreasing your budget and running your Google ads more efficiently and with less wastage.

For optimal results, we advise you to use both Google ads and Meta ads simultaneously. Meta behaves quite differently when it comes to advertising. Google Ads advertising is like prospecting. You are meeting new people who are looking for your products or services. Typically, at least fifty percent of our clients’ revenues are directly attributed to Google Ads, as Google Ads are very effective if you are running a successful business.

However, only pursuing new customers is not advisable. Profits can also be generated by offering new products and services to your existing customer base. You may also have some businesses or customers that need some time to think about your product or service offering and don't convert into a new customer immediately. This is where social media services such as Facebook and Instagram shine. You can tell a great brand story through these channels, and over time, people can learn to trust your business and choose to purchase more of your products in the future.

Managing your budget between Google and Meta ads boils down to asking yourself one important question. Is it more important to you to have new customer acquisition or brand recognition and share stories that are adding additional value to your customer base? If both of these are important to you, then you can split your budgets around fifty-fifty between Google and Meta. But if one of these is more important than the other, then you might adjust your budget accordingly. It’s also important to remember that return on ad spend is measured differently in Google ads compared to Meta, and as such is not always easily directly comparable.

It is usually better to work with a specialised agency that excels at the type of marketing that you wish to invest in for your business. If a marketing agency is very experienced at what you are trying to achieve, then you will be able to accomplish the result in less time and with less complexity than a marketing agency that is trying to do too much all at once.

Usually, agencies that try to do everything will either run out of time to make the most out of any particular channel, or they will be essentially experimenting with your account because they have limited client experiences to rely on.

If the Quantified Web manages your Google ads projects, you will no longer need to worry about project management for this channel. We will handle all of this on your behalf. However, we will want to meet with you to develop a robust strategy so that we are confident we are managing the project in a way that will get you the best results for your business.

That said, there may be times when an agency that handles everything is the right solution for you. This would be when you are seeking to outsource project management for many different channels at the same time and this is more important to you than your advertising performance. If this is your situation, then The Quantified Web might not be the right fit for your circumstances.