If you’re new to Google Ads it can be difficult to know where to set your initial bids, how much you should budget, what type of bidding you should use based on the number of conversion you get, and so on. In this blog post I’m going to reveal the Google Ads budgetary rules of thumb that pros have established based on many years of experience.
However, pros know that here are exceptions to every rule… thus these should be used thoughtfully and with care.
1. What’s the minimum number of daily clicks I need to buy?
In general you should aim for 10+ clicks per campaign per day. This is just enough clicks to ensure the algorithm runs efficiently, but more is absolutely desirable. Any fewer and you should expect to see a lot of variability, i.e. some days with no clicks and some days with a whole bunch. And Google will really struggle to bid efficiently for conversions.
2. How many conversions do I need to use automated “Smart” bidding?
If you’re running a single campaign you should have no less than 15 conversions a month to utilize automated “Smart” bidding. This means any of the following bidding strategies:
- Max Conversions
- Max Conversion Value
- tCPA
- tROAS
While I have personally seen automated bidding “work better” than manual even as low as 5 conversions a month, that’s really hard to confirm statistically given the very low total numbers and general market volatility. Interestingly enough, 15 conversions is the number that Google used to require in order to activate automated bidding. Here’s an old article from Google that still references 15 as a number to aim for, in this case for tROAS bidding.
If you are running multiple campaigns, you can get away with fewer conversions per campaign, assuming you’re using the same conversion goal(s). In this case I’d still aim for at least 10 conversions per campaign.
In general, though, a good rule of thumb is to generate no less than 25 conversions per month in your account (with just a few campaigns) in order to have fairly stable performance. Any fewer and you should expect some pretty severe monthly up and down swings.
3. How many conversions do I need to use all broad match keywords?
Google, of course, will say there is no minimum and broad match keywords are the best choice for most advertisers. But in practice, most advertisers do not benefit from an all broad match strategy until they have 3-4 months of stable performance and a minimum of around 50 conversions per campaign.
Without those two things I’ve seen campaigns quickly go off the rails with a small downturn in performance being quickly magnified over time. Essentially Google loses it’s way and starts targeting too broadly. When that happens you end up spending a huge amount of time adding tons of negative keywords without being able to tamp down the bloat.
So the answer here is as above… at least 3-4 months of stability, 50+ conversions per campaign.
4. How much should I spend on remarketing?
For an average account I recommend starting with about 5% of your total account budget. This usually works out such that you can reach your previous website visitors, generate a decent volume of conversions, while not taking away too much from your paid search cash cow. That said, how much you spend here should be adjusted based on the size of your target audience, average CPA, and traction. For example, if you typically get a CPA of $50 you should spend at least $500/month so that you can generate the 10+ conversions required to support automated bidding.
5. How big of a budget should I have before introducing a P-Max campaign?
First, if you’re an online shop, P-Max or Shopping or a combination of the two should be your core campaign(s) and get 90%+ of your budget. If, however, you’re running lead generation you should plan to spend enough to generate a minimum of 25 conversions per month. To calculate this use the average CPA from your search campaign(s). Now let’s say you get 50 conversions per month currently from your search campaign with a total ad spend of $5,000/month. Well then simple math you need to spend $2,500 on P-Max for it to run efficiently. That means either raising your account budget, borrowing from search, or some combination of the two.
I recommend against committing 50% of a search budget as a starting point to run P-Max. It’s just too much to risk. Instead, I would consider no more than 25%.
With all that said, at my agency we generally start thinking about P-Max once an account hits $10K/month in ad spend. That does get adjusted based on the average CPA as $10 is quite a bit different than $100 or $500.
Summary
While every account is unique these 5 Google Ads budgetary rules of thumb can help you manage your campaigns like the pros. Just be sure to monitor performance carefully and adjust as needed as the conversion data rolls in.
