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How to run successful ad campaigns on Google with a micro-budget
And why you probably shouldn't try by yourself
Hi 👋 and welcome to Dan’s Growth Newsletter, where I try to help you grow your business. If you like this content, subscribe (it’s free)!
Q: I want to run ads on Google, but I have a really small budget; what’s the best way to spend my advertising budget?
This is perhaps the most frequent question I’m asked when I’m consulting with family and friends on improving their digital marketing and growth efforts.
I have a few plays in my playbook that work pretty well, but for this week's newsletter, I got on the phone with Caleb Wolthuis, who is an expert in all things advertising and demand generation.
If your budget is under $1,000/month, don’t spend money on Google Ads
The first piece of advice that both Caleb and I agree on is if your budget is smaller than $1,000 you should not be trying to advertise on Google. You certainly can advertise on Google with any budget, but getting good results out of Google with a micro-budget is hard.
The reason it’s hard to successfully advertise with a small budget on Google is that Google is pay to play and $1,000 is barely enough to play, especially compared other advertisers who are spending thousands if not hundreds of thousands every month.
The other reason we both advise against it is because if every keyword you’re bidding on costs $2 and you have $1,000/month, you only get 500 clicks. Assuming your targeting and clicks are perfectly targeting the right customers and you’re converting at 3% then you get 15 leads. If you assume another 3% conversion rate (CVR) then you’re getting .45 customers per 500 clicks. So your $1,000 budget can generate half of a customer, so your customer value better be more than $1,000.
That said, you can (and we do) run successful campaigns with $500 (or sometimes lower) budgets every month, but we both suggest leaving it to the pros who know how to make it work. Here are some of the tips that pros use to advertise succesfully with a micro-budget.
Be careful of the advice you get from Google Ads platform, Google Ads support and blogs and videos online when working with a micro-budget
First, when I’m working with a micro-budget, I basically ignore everything Google tries to get me to do. Here’s why:
Google just wants you to spend as much money in their platform as possible.
Google Ads’ automated recommendations are made for companies spending serious money, not a micro-budget.
It’s not a knock on Google, but it goes without saying, Google makes money when you spend money in Google Ads. So everything they do is targeted towards getting you to spend more money.
Don’t advertise without data visibility
The other crucial component to running a successful ad campaign with a small budget is data visibility.
The goal of running a Google Ads campaign is to put in one dollar and get two dollars out, that’s what marketing is supposed to do.
If you are not able to determine if putting in one dollar gives you two dollars back, you are not ready to advertise on Google Ads, or any platform.
This means that before you start any advertising you need to be able to track some details in every stage of your funnel. This includes:
Advertiser platform analytics
If you can’t see how many people are hitting your website and buying your product, it’s impossible to determine how effective your advertising is. You’re basically just guessing.
Please stop guessing. Set up analytics or tracking.
I personally like Google Analytics for a simple install and tracking info and I really like Heap analytics for a deeper dive into how users are engaging on your website. Both are free or have free versions.
Now that you have some type of website analytics tool set up and tracking, you can collect some information about what happens after someone gets to your website and makes a purchase. So now we can start implementing our micro-budget playbook.
There are two strategies I recommend:
Strategy 1 - Bid on your own brand keywords to understand your audience
The first thing you need to understand is who is currently searching for your brand, if anyone is at all.
By bidding on your own keywords you can start to collect data on important demographic info like:
Where does your customer live?
How much money does your customer make?
What gender is your customer?
What age is your customer?
What other products does your customer buy or use?
All of this information will help you build an idea of who your customer is and the most effective ways to reach them.
Strategy 2 - Bid on 5 keywords in a small geographic area
Once you have a good idea of your customer is, you’re ready to start using keywords.
When you’re working with $500/month you can only spend $16/day. If every click costs $2, you will max out at 8 clicks/day. That isn’t very many clicks.
If you only get 8 clicks/day, you need to make absolutely sure that every person clicking your ad is someone who is ready to buy.
You ensure this by selecting 3-5 really good keywords.
If you are a pediatric dentist, you should not be bidding on the keyword dentist. The user intent behind someone searching for a dentist is very different from someone searching for a pediatric dentist.
If you are a party planner, don’t bid on venue based keywords. You want to help throw the party and Google might think that means you also have the party at your house, but that’s not where you want to spend money.
If you are renting a home, don’t bid on keywords like “buy a home”, those are very different search intents and you don’t have the budget or the clicks to waste on maybe changing someone’s mind.
If you’re a dentist you need to focus on keywords like “Pediatric dentist”, “family dentist”, “children's dentist”.
Don’t waste your money and clicks on services you don’t actually provide.
Keep it simple
These are the strategies I use for advertising with a micro-budget. There are a million more things you can do to advertise more successfully and effectively, but when you have a small budget, you need to pick your battles wisely, and you need to win them all.
I’d love to hear from other advertising professionals and small business owners, what works for you? If you’re spending a small budget, how do you use it successfully and how do you know that it’s working?