The Complete, Digestible Guide to AdWords Funds

Fund is a chore. Whether you are pinching pennies to pay hire for an overpriced studio overlooking a dingy alley, paving the road to internet moguldom, or both, at the same time, it drives the regular red blooded American up the wall.

There are ideas to mitigate the insanity. There is no way to completely avoid budgeting properly without hamstringing yourself down. This is the true in AdWords, where each single click represents either business growth and your hard earned cash becoming kindling.

Unluckily, resources that take an all-encompassing come close to PPC budgeting are scant. There is no free app. You have to figure it out.

To learn proper AdWords budgeting strategy from the ground up, we have put together the following guide.

Does your hatred for the important extend past budgeting & into reading? Fret not. We have distilled every section into a handful of tweet-length bullets.

Determining the initial AdWords budget

You have forked over your credit card information & funded your account. You have just downloaded AdWords Editor. You have to determine how much money you spend in your first quarter.

There are 4 key questions you need to ask yourself when determining your initial AdWords fund:

  1. How does AdWords fit into my current marketing plan?
  2. What (where) are my competitors spending?
  3. How much are the CPCs (costs per click) for the keywords I am bidding on?
  4. Which KPI matters most to me?

Once answered, you will be ready to dive into plan types, optimization and eventually, expansion. With that in mind, let’s jump into some questions.

How does AdWords fit into my current marketing plan?

If your business is a staple of the local community and has a well-established online presence (you are a thought leader driving organic traffic to your site with great SEO & even better content), there is a good chance leads will show up at your doorstep ready to buy. A fledgling business with its finger on the pulse of its target audiences can have something similar through a rabid social following. Other than time & the salaries of whomever spearheads efforts, this organic traffic is “free.”

The other marketing channels you employ in an effort to grow your business. Billboards, Ephemera, Purchased leads, Radio spots, Bench ads, Commercials, Events, Branded urinal cakes?

List out every marketing channel you use & riddle me this: Is the aim of your AdWords account to help existing efforts or supplant them?

What (where) are my competitors spending?

Outside of your keywords, you need to use a tool like the Keyword Planner / SEMRush (I would not pay any mind to the qualitative information, but the keyword lists & sample ads can be valuable) to get a plan of where your competitors are spending their AdWords funds.

Armed with this information, you can develop plan to unseat their advertisements from the SERP and find (cheaper) keywords nobody was intelligent enough to bid on before you came along.

How high are the CPCs for the keywords I am bidding on?

These tools I just touched on?

The most rudimentary way to determine a fund is to think the cost of the keywords you are bidding on. Should this be the information you use to establish a fund? Absolutely not. But it is a nice starting point.

Go to the AdWords Keyword Planner & enter one of your landing pages into. Change the remaining parameters accordingly (location, industry, terms to avoid, etc.) prepare to scroll through pages of potential keywords along with their relative popularity & advertiser competition.

Try the same thing with the page that corresponds to every of the products or services you offer. This will no hesitation uncover undervalued search terms for you to bid on. You want to seek out as many high-traffic, bad-competition terms (convey commercial intent) as you possibly can. That is your sweet spot.

We will get more in depth on this in a while, but it boils down to: Keywords that indicate urgency / familiarity are more likely to convert than ones that do not. A branded keyword takes more intent than a competitor keyword.

Which KPIs matter most to me?

We have saved the most important question for last. A KPI (key performance indicators) is a measurable value that lets a business / individual gauge performance. Not each business cares about the same thing.

CPA is the be-all-end-all. I can’t tell you how many kickoff calls start with a cost per acquisition plucked from thin air. If you are sure this is the KPI for your business, set an aim grounded in logic. If anything more concrete is your style, you have to figure out how many conversions (RIP converted clicks) tracked by AdWords. It takes on-average to result in a bona fide customer & determine your actual CPA. You could also leverage your existing CPA from some channels, make that your aim for paid search and ratchet up or down accordingly once you have got more account data to work from.

Many other KPIs businesses use as barometers for successful AdWords plans. If you are unsure of which is best for your business, there are some resources on performance indicators to get you began:

  • AdWords Metrics: How to Create Sense of Your PPC Data – A basic overview of the primary AdWords KPI’s including share, clicks & CTR, CPC, CPA and wasted budget.
  • Easy AdWords Bidding Plans for Newbies & Math Haters – Includes strategies & formulas for setting initial AdWords bids & determining your CPA.
  • Hacking AdWords: Larry Kim’s data-driven approach to maximizing results via Quality Score.


Once you have answered these 4 key questions take a look at your finding. To determine your ideal budget, you are going to want to think about the KPI(s) that you are going to judge performance on & the number of sales or leads you are looking to garner from AdWords. Look at the other marketing channels you are using & try to apply any relevant goals you have established as your AdWords point. Finally, consider the cost of keywords you are likely to bid on by examining the ones your competitors have chosen (the ones they haven’t).


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