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What's a good monthly AdWord budget for a new site?



4:16 pm on Jan 20, 2005 (gmt 0)

10+ Year Member

I recently built a small site for my husbands new business and have spent pretty much every minute of this week trying to learn about SE marketing.
I came up with a couple of AdWord campaigns that I am happy with and started them yesterday.

I was under the mis-guided impression that if I bid for a, say Top 5 rank, I'd start there and move up and down according to CTR etc etc but we seem to be starting out at rank 20+. I guess I just have to hope we move up!

Anyhow, we have a low budget to start with and I am leery of upping our bids/ adding more KW just yet. At the moment, my bids range from 0.05 to 1.25

I know this maybe an impossible question to answer, but for a new business & site, was is a reasonable advertising budget?

I'd appreciate ANY input on this, thanks!


4:22 pm on Jan 20, 2005 (gmt 0)

10+ Year Member

Well, no more than 3% of your profit but thats tricky at first unless people were waiting for the site to go live.


4:26 pm on Jan 20, 2005 (gmt 0)

10+ Year Member

Thanks! Although the site is new, 3% does give me something to work with because we do have other budgets and expectations. Thank you :-)


5:30 pm on Jan 20, 2005 (gmt 0)

I would say 3% is real low. If it is a growth company put as much as you can afford to grow the company. For my site(s) I put in about 80% of the profits so the next month is even bigger. If it keeps going at this pace the site(s) will be quite large within a year.

If you can get a positive ROI and a good bottom line with no matter how much you put in, put as much as you can. Scaling of economies doesn't seem to come into effect with small business online, there is enough market to sustain them and take away from the big boys like amazon, etc. Now they must have some crazy budgeting going on, oh wait, they have 500 million affiliates do it for them. Maybe you could try that as well?


8:08 pm on Jan 20, 2005 (gmt 0)

WebmasterWorld Senior Member adwordsadvisor is a WebmasterWorld Top Contributor of All Time 10+ Year Member

What's a good monthly AdWord budget for a new site?

Welcome to WebmasterWorld, themetalpeddler!

This may be sort of simplistic, but another way to look at it is to decide what sort of monthly budget you are willing to 'risk' in an experiment to see how well AdWords will work for your business.

Then divide that budget by 30 to arrive at your daily budget, and set your ads running.

Then monitor the heck out of your account, experiment/monitor/make changes - and pay as much attention to your ROI (Return On Investment) as you are able to.

If your return is positive, then you may well want to build things up over time.

If your return is negative, well, then time to regroup - and either decide that there is enough potential to continue, or perhaps call it a day.

Not particularly scientific, but not a bad way to start IMO. ;)



9:33 pm on Jan 20, 2005 (gmt 0)

10+ Year Member

Without knowing the actual market you are in, it is a tough thing to put a number on. To help determine a possible budget, I would start by figuring out your profit per product. Are you selling a big ticket item that brings in a large chunk of change? Or is it small little products that turn only a few dollars profit? This all should be taken into account.

Then after you determine this, it is much easier to help you estimate your budget spending. You would want to invest a certain dollar amount and hope for a conversion to make a profit in the end.

After you get these example numbers, it is then time to put them to work in an actual campaign. This is where you initial amounts get all thrown off because different markets react differently in the PPC engines. So I would say start with very small keyword groups and track them closely. Eventually you will find the winners and losers of the bunch.

After a few days of close watch, you will know what it is going to take to make profits and set a dollar amount budget. Feel free to sticky me if you want some additional market specific help.


11:20 pm on Jan 20, 2005 (gmt 0)

10+ Year Member

Thanks for the welcome and the input!

Well, so far I have tried to pick some broad keywords and some narrow ones, and they range from 0.05 to .70 (which was my limit - I couldn't afford the 1.70 something for the estimate no.1 slot for many of the keywords)

I don't want to be too specific because I know it's frowned upon to give too much info, but we are in the home & garden categories. My husband is a machinist & makes everything we sell and we compete against large mass-producing manufacturers and retailers.
We have been extremely successful in the online auction markets but this is very different!

The original budget that I wanted to invest gave such limited results I know I need to take more risk - being on page 4 ain't getting us anywhere! LOL 2 days in and even the impressions are in single digits!


11:21 pm on Jan 20, 2005 (gmt 0)

10+ Year Member

oh, meant to add - the items vary in price from $10 to $500, with profit margin of approx 50%


11:40 pm on Jan 20, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

As far as I recall, old fashioned marketing doctrines would dictate that you spend 15-20% of the profit margin on advertising/marketing (right across the board). How much of that you put towards Adwords is down to you. The other 80-85% goes towards re-investment...



6:54 pm on Jan 21, 2005 (gmt 0)

10+ Year Member

As long as there's a positive ROI, I've never seen the need for a budget. I'm currently spending several thousand per month on AdWords, but I would spend a million if they could send me that much traffic for my keywords.

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