3 ways to predict monthly ad spend prior to keyword research for a new Google Ads partner.

Imagine you’re in negotiation with a company who wants you to run Google Ads campaigns for them for the first time. If that company demands the monthly ads spend so that they can budget accordingly, it gets murky. When negotiating with a new, budget-conscious client, it is understandable that the company wants to know how much the entire campaign will cost. 

You may be aware that for Google Ads, you can’t really get around the keyword research phase of a successful Google Ads campaign. In fact it’s unimaginable. The keyword research is critical in determining a suitable monthly ad spend or budget.

Remembering that this is their first Google Ads campaign, meaning no foundation of data, we start by omitting variables. Here are 3 activities you can undergo to remove those variables, letting you predict monthly ad spend prior to keyword research:

1) Ask your potential client how many conversions they can actually handle and act on.

2) Ask if they can identify a conversion value - that is, the monetary value of one conversion. Naming this value gets easier and easier as campaigns run, but many companies still have a vague idea of the value of one conversion. This is an especially important question for Google Ads first-timers. Good news - conversion values will change and are rarely fixed.

3) As a rule of thumb, companies should aim to allocate around 10% of revenue to a marketing budget. From there, you could use this calculation from my earlier post, which details how to set your annual marketing budget. I recommend this process to estimate a responsible maximum allocation of that 10% for Google Ads. If your potential new client is aware of this responsible maximum, they'll only be pleased if you lower the ad spend amount after keyword research. 

Now you know the number of conversions that can be managed, a guess at conversion value, and a maximum available budget. Use inferences and review your other Google Ad campaigns to predict a monthly range for ad spend. Most importantly - be honest that you’re estimating and explain why you can only estimate. 

If this does not offer the comfort your potential client needs to begin a partnership, my final suggestion is to create your proposals so that the Keyword Research is billable as a separate service that precedes actual Google Ads execution. 

Thanks for reading.
- Frank