If you're not running Adwords ads yet, you're really missing out.
There's tons of moneymaking potential there, especially for certain niches and certain kinds of businesses.
But one of the biggest hurdles for business owners, especially solopreneurs, is budgeting.
Adwords is a pay-per-click platform, so it's important to make sure the money you spend on those clicks actually leads to sales, which generate more than you spent on them.
To begin with, you need to figure out how much in total you're going to want to spend on search ads.
You may need to reappropriate money from somewhere else to do this.
For example, if you've been spending a bunch on Pinterest ads and it hasn't been doing much for you, you may want to take some of that money and funnel it into Adwords instead.
In a recent blog post, AdEspresso — a leading SaaS platform for PPC — explains how you can set a reasonable budget for Adwords advertising, without bleeding yourself dry.
Money doesn’t generate out of thin air, meaning you’ve gotta find some place to get money from.
And if you aren’t looking to re-invest money into your business or take money from your bank account to do it, it’s gotta come from somewhere.
Hopefully not one of those “I need cash now” commercials, though. Please don’t do that. Ever.
In all seriousness, if you don’t have any money left in the budget and can’t afford to take from your bank account, you have one option:
Auditing your existing budget to find any gaps or wasted spend that you can use.
You can do this in a few different ways.
Option 1. Measure labor costs and adjust from there
It’s not always as cut and dry as analyzing a concrete number like sales from X platform.
Remember: Time is money, too. Your time is the most valuable thing you have.
So if you’re spending 10 hours a week on social media campaigns, even cutting back by five could free up tons of room in your budget.
To calculate this, you’ve gotta take your hourly rate (if you pay yourself a salary or are on a salary, divide it in half to get your hourly rate) and multiply it by the number of hours you spend on a task.
Hourly rate * hours spent working on X task = cost of that task in labor
Let’s suppose that your hourly rate for salary or services is $50 and that you spend 10 hours a week on social media campaigns.
Cutting back five hours would save you $250 in labor every single week.
That’s $1,000 extra each and every month in saved labor costs/overhead.
Now you can use that extra time/money to invest in a new platform, like AdWords.
Option 2. Trade one for the other
Another concrete way to generate a budget from thin air is by simply trading one platform for another.
But this isn’t always that easy.
The trick here is to analyze specific conversion data to see which platforms are taking up too much time and money with a low impact on your overall revenue.
For example, are you running email campaigns via a software that costs you $99 a month? What are the conversions like? What results do the campaigns get on average?
The goal here is to figure out where you can trim the fat. Where you can eliminate budget wasting efforts that aren’t driving sales.
If you can do that, you can free up room for AdWords.
To do this, you need to start analyzing your conversion data.
If you have goals set up in Google Analytics, you can measure goal completions and costs.
If you don’t have goal values set up, you can still calculate your costs by using an average lead value:
Total revenue generated by closed leads / total number of closed leads
Using this, you can analyze how much value a given platform is generating for your business.
Is Pinterest generating three leads per month? Multiply it by your average lead value.
Now analyze how much money you’re spending on direct spend and labor on that platform.
Is the labor and direct spend more than the average lead value or total monthly revenue from those leads?
Dump the platform and use that money on AdWords.
Option 3. Audit your tool costs
The last option is to conduct a quick audit of your existing overhead costs in the form of tools.
Most marketers will have a diverse toolset that they use. Keyword research tools, monitoring tools, social scheduling, and more. There literally is a tool for everything.
For example, I use dozens of tools on a monthly basis that cost money.
Now, if I needed room for my budget, I could probably cut a tool like Evernote out simply because it’s not essential to my business. I can take notes for free on it. I’ll just lose some functionality. But if that means getting to spend an extra $50 on AdWords, it could be worth it.
Take a minute to concretely analyze how much these tools cost and what your monthly bills look like.
Try eliminating non-essential tools or ones that aren’t helping you convert users into customers and using that extra room to form an AdWords budget.
You can learn more about how to calculate your Adwords budget in the full post from AdEspresso.