How Much Should You Spend on Google Ads?

Let’s say you just finished building a beautiful new website. You have a new brand that really portrays what your company is all about. You have new business cards, new truck wraps, and now you’re ready to start seeing more leads come in. We’ve all heard the spiel about how to boost your website rankings on search engines, how to add keyword-rich content to your website, and how to create a lasting presence on social media. All of these are great marketing tactics that should definitely be incorporated into your marketing strategy, but sometimes you may need an extra boost to help generate website traffic and leads quickly. One of the ways we achieve this is through Google Advertising.

Now you may be thinking, great, let’s run some ads, but how much is that going to cost? When thinking about the costs of advertising on Google, you might be tempted to compare Google Ads fees to other traditional advertising fees from things like billboards, radio spots, or local magazines. These forms of advertising all cost the same no matter what industry you’re in – a billboard for a contractor is going to cost the same as it does for the dentist up the street. It doesn’t work like this for Google Ads though. Instead of having set costs for everyone, Google Ads works more like a marketplace auction. In this case, the commodity that Google is selling is website visitors. Therefore, your cost depends on what industry you’re in, and the location and keywords you want to target. 

The Ultimate Answer: It Depends

Generally speaking, the dollar amount that you should spend on Google Ads every month varies widely depending on your sales goals, how large of a geographic area you want to target, the competitiveness of your industry, and if your competitors are utilizing Google Ads. It also depends on the search volume of keywords you want to target. You could spend as little as $50 per month or upwards of $5,000. Our recommendation with our clients is to consider a few questions first before creating a budget and jumping into an ad campaign:

  1. What are your goals for new leads or revenue?
  2. How much traffic do you need to reach these goals?
  3. What is your ballpark budget for spending on advertising?

Step One: What Are Your Goals for Leads or Revenue?

The first step in this process can be eye-opening for some. In order to hit your yearly revenue goals and continue to grow your business year after year, it’s important to map out exactly how many different home additions, custom home builds, basement finishes, or home remodeling projects you need to take on and at what cost in order to make the money you want to make. 

For example, you may determine that you need to complete 20 – 25 kitchen remodels over the next 12 months. So in order to reach this goal, you need to average signing two PSA’s or contracts each month. After looking at your historic lead data, you estimate that for every 10 leads you receive, you convert 2 – 3 of them into signing on, so ideally we want to average around 10 leads per month in order to reach your goal. 

In addition to various guerrilla marketing tactics and word-of-mouth exposure, let’s see how we can arrive at a realistic Google Advertising budget to achieve your goal of acquiring 10 new leads each month.

Step Two: How Much is This Traffic Going to Cost?

The next step in estimating your Google Ads budget is to find out the cost-per-click (or CPC) for the keywords you want to target within your service area. You can do this by using the Google Ads Keyword Planner or third-party programs like SEMrush or Ubersuggest.

It is also important to note the different costs per click between transactional keywords and informational keywords. Transactional keywords or phrases are used to find a service or projects that the searcher is looking to purchase, while Informational keywords or phrases are used when the searcher’s intent is to learn and find more information about the topic they’re searching for.

For example, this first list of keywords are typically used in search queries to find more information:

  • Cost to remodel a kitchen: $2.75 
  • New kitchen cabinets: $2.39
  • Kitchen remodeling designs: $3.56

At the same time, if we review the average CPCs for keywords that are typically used in search queries with high intent to buy, then the cost per click goes up by more than double. 

  • Kitchen remodeler near me: $6.10
  • Kitchen remodeling contractors: $9.63
  • Custom kitchen remodeler: $4.34

After doing some research on the specific keywords you want to target in your service area, you can find the average cost per click for your relevant terms and figure out how much it will cost to buy a certain number of visits to your website. For example, if your average CPC is $5 and you’re looking to buy 200 website visitors each month, then your monthly ad spend budget will be $1,000. 

Step Three: Website Conversion Rate

Finding your website conversion rate takes a little digging into your website’s Google Analytics data and call conversion metrics if you have them. Conversions include someone filling out the form on your website or clicking the link to call you from your website. If you have not historically tracked your website traffic, conversion rates, or phone calls, you should consider setting up Google Analytics and Goal Tracking as it is an important piece to the puzzle in making strategic marketing decisions. 

In general, the average conversion rate (forms + phone calls) for home remodelers is 4 – 5%, so for every 1,000 visitors to your website, you should expect 40 – 50 contact form submissions or phone calls from people interested in your services. 

Step Four: Put it All Together

With a little simple math, let’s look at our numbers so far. If we are budgeting $1,000 a month for 200 website visitors (avg. $5 CPC), then out of those 200 visitors, we estimate 10 (5% of 200) will convert into a lead either by a phone call or through your contact form. If we look back at our original goal of averaging 10 leads per month to sign 2-3 PSA’s, then we’ve found our cost for advertising on Google.

You may go through these steps with your own numbers and find that what you originally budgeted for Google Ad spend is either too much or not enough to meet your goals and you may need to adjust.

Ultimately, we believe if you have a good foundation of a website, goals for your company, and a basic marketing plan, going through these steps and utilizing Google Ads can be a great investment in helping move the needle for your business and generate website traffic and leads. 

It’s Not Always Black and White

Now, we all know digital marketing isn’t so black and white with perfectly round numbers like our example. In addition to utilizing Google Ads, you will get website visitors and leads who may have come to your website through other avenues like social media, a simple Google search, or seeing your signs at a current project you’re working on. Additionally, your conversion rates will fluctuate over time. The CPC for keywords in your service area may increase or decrease. That’s why It is important to review and optimize your ad campaigns on a regular basis. 

As we’ve displayed throughout this blog, Google Ads is a great tool to use when it comes to growing your website traffic and leads. As you continue to grow your reputation as a business and your digital marketing footprint online, you’ll find that your organic traffic and organic conversions will continue to increase month after month, resulting in the need for less paid traffic and conversions. In this case, it may be time to cut back on your Google Ad Spend – digital marketing and advertising is a constant game of numbers, but, when done correctly, you will see incredible results.  

Learning how to use Google Ads for your business can be beneficial for your marketing strategy, but we also know how overwhelming and time-consuming it can be. If you think it’s time for your business to start running ads to help you achieve your revenue goals this year, but you know that it’s something you don’t have time to learn and maintain, then Keokee is here to help! We specialize in digital marketing for custom home contractors and remodelers and have helped many companies grow their website traffic and conversion rates to meet their revenue goals. If you’re interested in learning more about how we can help, give us a call or contact us today to turn your website into a lead-generating machine.