Google Ads Budget Strategy

Andy and Lindsey discuss how to decide what to spend on your Google Ads. Andy shares his simple basic formula (we put it below for easy access!) Bao shows off his amazing talents and the PPC Pitbulls celebrate an official addition.

Andy's Google Ads Budget Formula:
(1) Determine your Average Order Value (AOV), or the average amount someone is spending when they purchase from you.
(2) Determine your target Return On Ad Spend (ROAS). This is usually in a multiple like 2x (or 2 times), 3x (or 3 times) the amount you put in for ads.
(3) Multiply that by 30 - 50 to determine your starting budget.

(1) Our goal is 30 - 50 purchases to get enough good data into the model.
(2) Your AOV is $100.
(3) Your target ROAS is 2x (or 2 times the amount you put in on ads).
(4) With a 2x ROAS, if we put in $50 it will give us $100, or our AOV.
(5) Knowing that $50 is about the cost of acquiring a purchase, we will multiply that with our goal of 30 - 50 purchases.
(6) We get a basic starting budget of $1500 - 2,500.

Your AOV, ROAS, and goal for purchases/conversions may be different! Test and see what works best for your e-commerce business.