While I’m not asked this question directly very often, I am frequently asked whether “$X” is enough budget for a Google Ads campaign. This is kind of looking at it from the wrong way around. That said, I do understand that advertisers often have a “what’s affordable” number in their head.

minimum viable budget

In this article I’m going to address a few different aspects of low budget campaigns, but mainly help establish what’s a minimum viable budget to set you up for success. Note that when using the two calculations below you should use the higher budget as your minimum.

Minimum Number of Clicks

This comes right from Google. You should not run a Google Ads campaign unless you can generate at least 10 clicks per day on average. This is a minimum threshold to maintain stable ad serving and spending against budget. Any fewer clicks and you can expect a lot of volatility as well as a high likelihood that you aren’t entering auctions for the most desirable search queries.

This is a great place to start in terms of your budget floor. Figure out your expected average CPC (use keyword planner, SEMrush, etc.) or look at your historical data if you’ve already run campaigns. Let’s say your average CPC is $5. Multiply $5 x 10 and you arrive at a daily budget of $50.

Importantly, when you want to advertise in a competitive niche with high average CPCs, your budget naturally needs to be larger. Take for example Plumbing where average CPCs are around $10 which means a $3,000 ad spend would be your minimum.

Minimum Number of Conversions

For the purposes of this article, I’m assuming any advertiser looking at a minimum budget will be running one fairly simple search and/or shopping campaign. This means a handful and not hundreds of keywords or products. This is important because adding more variables increases the number of conversions required for optimization.

With that one simple campaign experience, and industry consensus, tells me that getting at least 10 conversions per month is necessary in order to support optimization. This includes benefiting from Google’s automated bidding, ad combinations, and manual optimization such as adjusting keyword strategy, targeting, and ad copy variations.

Why 10 conversions?

The truth is that most PPC managers really look for around 25-30 conversions per month as a healthy minimum. At that volume campaigns tend to be fairly stable and initial optimization can occur over a period of weeks rather than months. But 10 is just enough to chip away at performance… it’s slow but progress can happen in most cases. As an industry veteran I wouldn’t take on an account with a bottom of the barrel budget as the likelihood for success is very low. As above, we like to be at least 2-3x the minimum budget to ensure a high probability of success and a short road to better performance.

But if you must, following the 10 conversions rule of thumb, simply multiply the expected CPA x 10 to arrive at your minimum viable budget. Let’s say your average CPA is $100… that works out to a $1,000/month budget, or ~$33/day. Note that while CPA isn’t a great KPI to evaluate return for an online store, it still works to help establish the minimum viable budget.

Don’t know what to expect for CPA? It’s really hard to estimate what’s achievable without historical data but you can turn to some industrial averages or get some insider info from competitors or agency.

What if you cannot afford to generate 10 conversions per month?

Under these circumstances you might consider creating a micro conversion such as people that visit multiple pages of the website, download an e-book, sign-up for your newsletter, add an item to the shopping cart, etc. These are not the same as an order or a request for quote, but it can help you generate more conversions to boost optimization.

Do You Really Need to Spend the Minimum?

Here’s the common scenario when you run a campaign with an insufficient budget.

The first and biggest problem is simply a lack of business outcomes. Say you only generate 3 leads a month and your typical closing rate is 10%. Well you might get 1 client after 3-4 months for all that effort to manage your PPC campaign… not very inspiring.

The second problem is the inability to optimize your campaigns. Even if you build something pretty solid as a starting point, the lack of conversion data means you don’t have any clear path to improve performance. And so you don’t ever reach the full potential of the ad platform. Instead of eventually spending $5,000/month and closing 5 new clients you continue spending $2,000/month with no new clients.

The third problem is if you pay somebody to manage it this situation causes frustration for all involved. You as an advertiser don’t get consistent results and the service provider is stuck in purgatory.

Summary

There are a couple of simple calculations you can do to figure out what your minimum viable budget is for Google Ads. Keep in mind that you should choose the higher of the two figures and that 2-3x that budget is far more likely to result in a good outcome and faster optimization.

But if you must work with a low budget aim for at least 10 clicks/day and 10 conversions/month. And, importantly, when given a low budget start with just one campaign, one ad group, and a handful of highly relevant keywords. You can always scale up when your campaign is performing well.