Before you hand a Google Ads account to a management service, it helps to understand the three numbers that decide what you spend: the daily budget, the bid and the actual cost of each click. This article explains each in Google’s own words, and how Ad Rank ties them together. It gives no dollar figures, because those depend on your trade, your area and the auction on the day.
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The daily budget
In Google Ads, “you choose a daily budget for each campaign.” It is the figure you set for how much a campaign should spend on an average day, and “you can change your average daily budget at any time.” If you think in months, Google’s own advice is to divide your monthly budget by 30.4 to get the daily figure.
Worked example, no real prices
If you decide on a monthly amount of M dollars for one campaign, the daily budget is M divided by 30.4. Split across two campaigns, each gets its own daily budget.
The bid and the actual cost
Your maximum cost-per-click bid is the most you are willing to pay for a click. What you actually pay is often less. Google: actual cost per click “is the final amount you’re charged for a click. You’re often charged less, sometimes much less, than your maximum cost-per-click (max. CPC) bid.”
Ad Rank: why money is not everything
Ad Rank is what decides “whether your ads are eligible to show and if eligible, where on the page your ads are shown.” Google says it is “calculated based on several factors, including your competition, the context of the person’s search, and your ad quality at that moment,” with “different auctions for each ad location.”
Quality Score
Ad quality shows in Quality Score, which has three parts: expected clickthrough rate, ad relevance and landing page experience. Each is rated “Above average”, “Average” or “Below average” against other advertisers whose ads showed for the exact same search over the last 90 days. Better ads and better landing pages can help you show with the same budget.
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Questions to ask a Google Ads management service
- What daily budget do you suggest to start, and why?
- How will you split it across campaigns?
- How will you track which clicks become customers?
- What will you change as you learn, and how will you tell me?
- Is your fee separate from the ad spend, and is the account in my name?
Where the budget is spent
A budget only goes as far as the targeting lets it. Google Ads lets you aim at countries, cities or a radius around a point. Its broad setting, “Presence or Interest”, reaches people in your area and people showing interest in it. If you serve only part of Denver, drawing the area tightly keeps the budget on the people who can become customers.
The searches matter as much as the map. A campaign that shows for job searches, free advice or services you do not offer spends your daily budget on the wrong people. A management service should show you which searches your ads appeared for and which ones it has blocked.
Budget and landing pages
Because landing page experience is one of the three parts of Quality Score, the page an ad sends people to affects how your ads compete. Sending every ad to the homepage is a common waste. Each group of searches should land on a page about exactly that service, which is one reason Google Ads work and web design work so often go together.
For more on running an account, see PPC management in Denver and the advertising agency in Denver page.
Questions people ask
How much should I spend on Google Ads?
No honest answer is possible without knowing your trade, your area and your goals, and this site gives no figures. Start with a daily budget you are comfortable testing, and ask an agency to explain its suggestion.
Can I change my budget later?
Yes. Google says you can change your average daily budget at any time.
Do I always pay my maximum bid?
No. Google says the actual cost per click is often less, sometimes much less, than the maximum bid.
Why did my ads stop showing for some searches?
Ad Rank is worked out again for every search, from your competition, the context of the search and your ad quality at that moment, so eligibility and position can change from one search to the next. A budget that runs out early in the day can also limit when ads show.
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