How Much Should You Be Spending On Google Ads | eCommerce Calculator

Are you running an online store and wondering how much to invest in Google ads? With so many variables at play, it can be challenging to determine the right budget. But fear not! We've created a simple calculator to help you predict your Google ads' performance and decide on an optimal budget.

How it Works

Input Your Ad Spend: Decide how much you want to spend on Google ads. For this example, let's say it's £1000.

Know Your Average Cost Per Click (CPC): This is the average amount you pay each time someone clicks on your ad. If you've run Google ads before, you should have this data. If not, do some research to find out the average CPC for your industry. Let's say it's £0.82 for this example.

Determine Your Website Conversion Rate: This is the percentage of visitors to your site who make a purchase. On average, this can range from 2% to 5%. For this example, let's go with 3.56%.

Find Your Average Order Value (AOV): This is the average amount a customer spends when purchasing on your site. The higher, the better. Let's say it's £76.

Crunching the Numbers

If you spend ad £1000, here's what you can expect:

• 1162 clicks
• 41.4 purchases
• Revenue of £346
• Return on Ad Spend (ROAS) of £3.15

But remember, these numbers aren't set in stone. You can improve them by focusing on three key variables:

Google Ads Campaign Optimization: Hiring a skilled agency or expert can significantly impact your ad performance.

Website Conversion Rate (CRO): A well-optimized website can convert more visitors into customers. Invest in improving your site's user experience and conversion rate.

Average Order Value (AOV): Encourage customers to spend more by offering upsells, premium products, or adjusting your pricing strategy.

Fine-Tuning Your Strategy

If you improved your conversion rate to 4.3% and increased your AOV to £105. Here's how the numbers change:

• 150 purchases
• Revenue of £1575
• ROAS of £5.25

As you can see, small improvements in these variables can lead to significant boosts in revenue and ROAS.

Conclusion

So, how much should you spend on Google ads? It depends on your goals, industry, and current metrics. Use our calculator as a starting point, but remember to continually optimize your campaigns and website for better results. If you are not clear about anything, please watch my video.