Guide to Google Ads Budgeting: Allocating Funds for Maximum Impact

When it comes to boosting your online visibility, Google Ads can be one of the most effective tools in your digital marketing toolbox. But here's the truth—running a Google Ads campaign without a clear budgeting strategy is like throwing darts in the dark. 

Whether you're a small local business or working with a Minnesota PPC agency, properly allocating your Google Ads budget is essential for generating maximum ROI and avoiding wasted spend.

This guide will walk you through everything you need to know about Google Ads budgeting, including strategies for allocating your funds and tips to ensure every dollar is working hard for your campaigns. 

By the end, you'll gain the confidence to structure your ad spend effectively and make data-backed decisions that put your business a step ahead of the competition.

Why Google Ads Budgeting Matters 

Running Google Ads is more than just setting an ad live and waiting for results. Your budget controls everything—how many people see your ad, where it appears, and how often your business is front and center for your target audience.

Improper budgeting can lead to:

• Ads not showing due to exhausting your daily budget early in the day.
• Overspending on underperforming campaigns.
• Limited reach in competitive industries like travel or e-commerce.

A well-planned budget could be the difference between burning your cash and driving results—whether that means phone calls, form fills, or product sales.

Step 1: Determine Your Total Monthly Budget 

Before deciding where to allocate funds, establish how much you're comfortable spending overall. Experts, including some top Minnesota PPC agencies, typically recommend businesses allocate between 5-10% of their overall revenue to marketing. Of that, a considerable chunk should go to digital advertising platforms like Google Ads. 

For example:

• A small bakery earning $10,000/month might start with $500-$1,000 for Google Ads.
• A medium-sized law firm grossing $100,000/month might allocate $5,000-$7,000.

Ultimately, your Google Ads budget needs to align with your revenue, goals, and competition level.

Step 2: Understand Campaign Objectives 

Each Google Ads campaign should have a clear goal, which largely influences how you allocate spending. Here are the most common objectives and their budgeting priorities:

1. Lead Generation 

If you're looking to drive form submissions, phone calls, or newsletter sign-ups, focus your funds on Search Ads with highly targeted keywords relevant to your industry. For example, if you're a plumbing business targeting "24-hour emergency plumber," direct your spend toward high-converting keywords that show strong user intent. 

2. Brand Awareness 

For building your brand name, consider Display Ads and allocate a portion of the budget to YouTube Ads. These formats are cost-effective and excellent for reaching a broader audience. 

3. Product Sales (E-commerce) 

Are you running an online shop? Prioritize Shopping Ads, which showcase your products directly on search results. Allocate additional funds for retargeting campaigns to re-engage users who abandoned carts. 

Step 3: Divide Your Budget Across Campaign Types 

Many businesses choose to split their Google Ads budget across multiple campaigns to maximize visibility and conversions. Here's how a typical division might look:

1. Search Campaigns (50-60% of spend) 

Search campaigns typically drive the highest intent clicks, so they deserve the bulk of your budget. You’re directly addressing users who are actively looking for your product or service. 

2. Display Campaigns (20-30% of spend) 

Display campaigns are affordable and great for creating brand awareness. They work well for reaching new audiences but may have lower conversion rates. 

3. Remarketing Campaigns (10-20% of spend) 

These campaigns ensure your business stays top of mind for users who have interacted with your site before. Retargeting is particularly cost-efficient and often leads to higher conversions. 

Pro Tip 

If you're managing a local campaign (perhaps with help from a Minnesota PPC agency), make sure some of your resources go into Location Targeting to zero in on customers near you.

Step 4: Know Your Bidding Strategy 

How you bid for ad placements also affects budgeting. Google Ads offers several bidding strategies tailored to different goals. Here are the main ones to consider:

• Maximize Clicks (good for traffic): Ensures you get as many website visitors as your budget allows. 
• Target CPA (Cost-Per-Acquisition) (good for leads): Automatically sets bids to generate conversions close to your desired cost-per-lead. 
• Maximize Conversions (good for lower funnels): Focuses on driving the highest volume of conversions within your budget. 
• Target ROAS (Return On Ad Spend) (good for e-commerce): Optimizes for campaigns that deliver a specific revenue return. 

Work closely with your PPC team or agency to determine the bidding strategy that makes sense for your campaigns.

Step 5: Monitor and Adjust Regularly 

Google Ads isn’t a “set-it-and-forget-it” kind of platform. Once your campaigns are live, monitoring their performance is critical to ensuring your budget is being spent effectively. 

Tools to Use for Budget Monitoring:

• Google Ads Dashboard provides data on clicks, impressions, and costs.
• Google Analytics tracks conversion behavior and user journeys. 
• Split Testing helps compare multiple ads and determine the highest-performing variation. 

If one campaign is consistently driving conversions while another lags, shift additional funds toward the stronger campaign for maximum impact. 

Step 6: Work with an Expert 

Google Ads can quickly become overwhelming without experience. By partnering with a professional, like a Minnesota PPC agency, you’ll get access to expert insights, customized strategies, and hands-on management. PPC professionals help ensure every dollar spent aligns with your overarching goals and delivers measurable ROI. Whether it’s for competitive bidding strategies, keyword research, or audience targeting, having a pro in your corner makes all the difference. 

Actionable Steps to Take Next 

To make your Google Ads campaigns work harder for you:

• Allocate your marketing budget upfront, focusing on a mix of search, display, and remarketing campaigns.
• Regularly monitor performance to fine-tune your spend. 
• Leverage expert advice from a trusted partner or agency for advanced strategies. 

Need help executing your marketing goals? Collaborate with a Minnesota PPC agency today for tailored solutions that ensure your ad spend works harder than ever before. Don’t just run ads—run ads with purpose. 

Want to refine your Google Ads Budgeting further? 

Start leveraging business listings today, and watch your brand thrive. For further insights and personalized strategies, partner with Jackson Method—your trusted Google Ads expert in Minnesota. 

Together, we can unlock the full potential of your online presence and achieve your business goals. You can reach us at 612-888-7607 or fill out our contact form to know more.