I get asked one question pretty frequently. I get a lot of pay-per-click questions, SEO questions from investors, people wanting to know more about online marketing. The most common one that I get by far is, “What should my budget be? What’s a good starting budget? What’s a good monthly budget? What do I need in order to do Adwords?”

This is a real source of anxiety for people. I certainly get it, because pay-per-click is an expensive channel for investors. If you’re doing the whole motivated seller thing, it can cost a lot of money if you are not doing it in an intelligent way or you’re not really sure how to get started.

Google and Budgeting

Google changed its budgeting policies recently. Your budget used to be the maximum, and you would never go over that number. Google changed the way they process billing so that now they are trying to hit that number. So it’s not just the maximum, that’s your goal.

Budgeting is really important if you are getting into this space. The first thing I want to get across is that there is no such thing as the right budget. There’s no such thing as a bad budget or good budget. If you want to do some Adwords, you’ve got to have some money, but you don’t need a certain amount.

What budgets do is dictate your strategy and your timeline. So when you ask “How much money do I need to get into that game?” there really isn’t a catch-all answer to that.

How much do you want to invest? What parts of your budget aren’t intrinsic to your strategy? What needs to move and shift, if anything at all?

These are all things that really make a difference. You don’t need a certain amount of money in order to invest in pay-per-click as an investor.

So how do you even begin to ask this question? You need to know a couple of different things.

Goal-Setting, Timeline, and Market Conditions

One thing you need to know is what your goals are. Your goals are really going to dictate what budget is required. If you need to do two deals this month, there’s going to be a certain amount of money that you’re probably going to need to put aside in order to do two deals in 30 days. If your goal is to do two deals this year, you obviously need a very different type of budget.

The other thing you need to know is your timeline. What range of time are you trying to achieve that goal in? You’ll notice I said two deals a month or two deals a year. Obviously it makes a big difference. So how much time do we have? Generally, money in pay-per-click, in terms of your budget, is going to buy you speed. It’s not necessarily going to buy you a better result, it’s going to buy you a speed at which you get that result.

So if you’re trying to do two deals, you can do two deals in a month or you can do two deals in a year. You’re going to need very different amounts of money in order to do that.

The final thing you need to understand is your market conditions. In some regional markets, the cost to invest in pay-per-click goes up and down, just like the stock market goes up and down.

So it really depends on your goals, on your timeline, and your market. Once you know those things, you can start thinking about how much money you actually need.

It’s hard to give a rough estimate in a blog post like this. But what I would say is if you really have to do a deal, and you’re trying to guarantee that, budget more than you think you need. If you have time to experiment and you’re not trying to do a deal right this moment before you go out of business, then you can budget a little bit less.

Just view it like any other marketing channel. You don’t have to spend a certain amount of money in direct mail in order to do deals. You’ve just got to change your list, change your approach, change your tactics.

There’s no amount of money you have to spend. What you need to understand is the tactics, the strategies, and the mindsets that are going to allow you to use that budget effectively.

Take care, guys.

Photo source: Pixabay

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