Signs Your Google Ads Account Is Bleeding Money

You know it’s possible to make money with Google Ads. You’ve seen it work for your competitors. But something doesn’t seem to be clicking for your ads. You’re spending, but you’re just not seeing the return.

Sound familiar? Your Google Ads account may be bleeding money. Read on as we explore the warning signs this is happening, and share how to quickly — and accurately — calculate a reliable Google Ads budget.

3 signs your Google Ads account is bleeding money

Here are three major red flags that your Google Ads account is wasting money.

  1. You’re getting clicks but not conversions. Something is going wrong once people land on your site, whether you don’t have conversion tracking set up or your landing page doesn’t match what your ad promised.
  2. You don’t have a negative keyword list. By adding negative keywords, you tell Google not to waste money on irrelevant keywords for your campaign.
  3. Your Quality Scores are low. When you have a low Quality Score, Google shows your ads less and charges you more per click.

How to calculate your Google Ads budget in one simple formula

So, how much should you really be spending on Google Ads? Here’s a reliable step-by-step formula you can use to calculate your Google Ads budget, assuming your goal is conversions.

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1. Check your conversion rate

Start by checking your website’s current conversion rate. 

If your business is new or you’re not sure of your conversion rate just yet, that’s okay. You can look up the average conversion rate for your industry by asking your favorite AI tool, whether it’s ChatGPT, Google Gemini, or Claude.

2. Estimate your cost-per-click (CPC)

Next, go to Google Keyword Planner and look up the target keywords you want to bid for. Google will show you both the low- and high-range costs to be on top-of-page. 

You can use both of these numbers to estimate an average cost per click (CPC) for your campaign. Just calculate their average to get your estimated CPC.

3. Calculate how many clicks you need to hit your target conversion amount

Google’s algorithm optimizes best when you hit at least 30 conversions, so we’ll use that as an initial target for the sake of simplicity. Note: when doing this calculation yourself, you’ll want to replace 30 with whatever your target conversion amount is for the month (whether it’s 50, 500, or 5,000).

To calculate how many clicks you need to reach your goal of 30 clicks, multiply it by your conversion rate. For example, if you have a 2% conversion rate, you’ll need 1,500 clicks to get 30 conversions.

4. Multiply to determine your total target cost for a campaign

To calculate the total monthly cost for a campaign, multiply the total number of clicks by your estimated CPC. 

Let’s say the CPC for a keyword you care about is $0.50. If you need 1,500 clicks and your average CPC is $0.50, your total estimated cost is $750.

5. Divide by 30 to determine your daily budget

Finally, to determine your daily campaign budget, you simply divide the total monthly cost for a campaign by 30 (or 31 or 28, depending on the month you’re in). 

Using our current example for a 30-day month, a $750 total means setting a $25 daily limit.

Stop wasting money on Google Ads

Figuring out a Google Ads budget is one of marketing’s biggest challenges. Using this formula is your first step to calculating a budget that earns money for you, instead of wasting it. 

Ready to transform your Google Ads account into a ROI-boosting channel? Contact the advertising experts at Your Marketing People.

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