Inside Google Ads podcast: Episode 23 - Small budget, Big results

Can you run Google Ads with a low budget? 

Yes, but it's harder than you think. 

When I worked at Google, I worked with clients who spent hundreds of thousands of dollars a day, if not millions of dollars a day, on Google Ads, and while that may sound complicated and stressful - sure, it was - but that's actually like running Google Ads on Easy Mode.

Because when you're spending that much money, Smart Bidding works perfectly and Broad Match works perfectly and all the AI works perfectly, whereas when you have $220 a day or $30 a day, the margin for error is much smaller. It's a lot harder.

That's why I wanted to focus today's episode on how you can still drive great results from Google Ads, even on a modest budget.

Now for those who are in North America, you know that today is a holiday in the US and it was just a holiday in Canada. Hello, my fellow Canadians!

And so, I want to do something a little different this week. What I'm going to play for you now is a 20-minute workshop I did at the Paid Search Association conference in 2023.

Now, before you come for me, I know this is from a year ago, but there's a ton of useful information in here. I've edited out the few pieces that are out of date, so I hope you'll enjoy these 15+ tips I can give you to drive great results from small budgets in Google Ads.

I'm your host, Jyll Saskin Gales. I spent six years working for other brands at Google, and now I work for you.

This is Inside Google Ads, Special Episode 23, Small Budgets, Big Results.

Let's have a listen.

How can we make sure that we are making the most of small Google Ads budgets?

First thing’s first is to get your data foundation in place. A house with no foundation is bound to crumble and there are a few key things that are, of course, important for Google Ads accounts of all sizes, but I find are often missing from brand new Google Ads accounts or Google Ads accounts from small business owners.

So here's kind of the mental checklist I always have in place, and I recommend you have in place as well, if you're helping a small business owner get started with Google Ads. 

First, of course, is conversion tracking. Now when we're working with small accounts it's unlikely that we're going to have a tool like Google Tag Manager in place. The Google channel in Shopify can implement conversion tracking really well. Of course, Google Analytics is a great way to set up conversion tracking. 

Next is your Audiences. Website Remarketing, sure. I also recommend uploading a customer list (yes, even for small businesses). Although smaller accounts aren't eligible to use Customer Match in Google Ads, because you have to have a lifetime spend of $50,000, which most small accounts don't have, it's still beneficial to upload that customer list and here's why.

When you upload that list, as long as it meets the thousand-matched email addresses requirement, you're going to get a ton of insights from it and that can actually help you maximize your budget.

I'm going to give you an example of how I did this with a client. I was working with a business that sells second-hand baby and children's clothing online and spending, you know, $30 to $40 a day, a very modest budget. We uploaded their customer list of a few thousand customers and we expected that their top audiences from their customer list would be parents of babies, parents of toddlers, and parents of kids.

But what we actually found when we uploaded that customer list into Audience Manager is that the top audiences from their customer list were people in market for strollers and people in market for nursery furnishings.

Those of you who've been through the process of having a child before may know when you buy your stroller or your nursery furnishings. It’s not when you have the kid, but when you're pregnant, when you're expecting the kid. So this is a really great insight for this business to realize that many of their customers are people who haven't yet given birth, and that totally changed the way we approached their messaging and targeting in their Google Ads.

That's just one example of why it can be really beneficial to upload your customer list even if you can't use the Customer Match functionality yet.

There are two other pieces to your data foundation.

The first is thinking about attribution. Now, at small budget levels, it's really not going to make much of a difference if you use Data Driven Attribution or Last Click or First Click. You're probably only going to have one or two campaigns. I usually like to start with Data Driven Attribution, because it's there and it's available, but it is not going to make the biggest difference in the grand scheme of things at low budget levels. 

And then finally, account linking. This is something that so many small business owners miss. Make sure you link your YouTube account to Google Ads so you can have YouTube remarketing lists - so powerful, especially if that business owner is really actively creating content. Linking your Google Business Profile, linking Google Analytics, and of course, linking Google Merchant Center. Link all of those things together so that all the Google systems can work together and set up your small budget to have maximum success.

Alright, first thing’s first, data foundation in place. 

From there, what I recommend you do when you're working with a smaller budget is optimize for a micro conversion. 

A micro conversion, what do I mean by that? Well, a micro conversion is a step that a customer must take on the route to conversion. 

So, for example, if the action you want someone to take on the website is to make a purchase, that's great, but as a small business owner, maybe you only get a purchase every couple of days. It's not going to provide enough information for the algorithm to learn.

So what we can do is ask, what is the step that happens before a purchase? Well, before a purchase, someone has to start a checkout. Maybe for every two “start checkouts” we get one “purchase.” So if we start optimizing for start checkout we'll have twice as much data.

You can even work it back a step further. What happens before someone can start checkout? They have to add something to the cart, so maybe we start by making “add to cart” the thing that counts as a conversion, because for every 6 “add to carts,” we get 2 “begin checkouts.” Now we've tripled the amount of data we have, and of course the more data we're feeding Google Ads, the faster it can learn.

Here are a few examples of common things that I will set up to count as Primary Conversion Actions in Google Ads when I'm working with a small budget. Add to cart or begin checkout, as I mentioned, on the Ecommerce side. On the B2B or Lead Gen side, visiting the contact page or visiting the pricing page. And then if it's a really simple website where it's like a one-page landing page and there's not really much you can track, even tracking engagement (which you can do in GA4) or time on site, just something to help Google Ads differentiate between who's more likely to convert and who's not is really going to set you up for success with a smaller budget.

Once you have your data foundation and your micro conversions in place, what I recommend 9 times out of 10 is start with Search. 

I love that there are so many different campaign types in Google Ads. Discovery [now called Demand Gen] is a personal favourite of mine. I think YouTube is so underutilized. Of course, we're having lots of fun with Performance Max over the last year.

When you're working with a really modest budget, I would say 9 times out of 10, just start with Search. It's the bread and butter of Google Ads. It's one of Google's most unique offerings in the marketplace when you compare it to other ad platforms, and it's really what most small business owners think of when they think they want to start running Google Ads.

Here are a few tips I have to try to maximize your Google Search investment on a small budget.

First is to make the distinction between whether you're going to run a Standard or a Dynamic Ad Group. A Standard ad group being one where you choose the keywords and a Dynamic ad group being one where Google looks at your website and determines which searches to show ads on, based on that.

And here's actually a little trick I like to use. In Google Ads, you can go to Keyword Planner, and then start with a website, and put in the website that you're planning to use as your final URL, the place you want someone to go to when they click on your ads. Then see what keyword recommendations Keyword Planner comes up with based on that landing page.

If 80% or so of those keywords are ones you would want to use, then just go ahead and do a Dynamic ad group. It shows that Google really understands your website well, which is great, and although it may require some more upfront whack-a-mole with negatives, it's going to save you a lot of time, stress and management in the long term. 

Now, if you do this exercise and you find that a lot of the keyword recommendations that are coming up are not relevant to your business, well now you know two things. First of all, you should go with the Standard ad group, because you do need to pick your own keywords. Secondly, it means that you probably want to work on the SEO for this website.

I love how the fields of SEO and SEM are becoming more and more intertwined, and this is one of those places. If Google is not able to understand what your website is about, you're going to have more problems with your Google Ads than if Google is able to understand it.

So if you're starting your Search campaign, try to go for Dynamic if you can. If not, then go Standard, but this is a great way to know if you have some work to do on your SEO.

From a budget perspective, throughout this presentation I've been saying “low budget, low budget, low budget” and I know that that is a very…what's the word? Subjective. What do we define as a low budget? 

You know, when I worked at Google in Large Customer Sales, four figures would be tiny, tiny, tiny budgets. Whereas now, if I work with a small business owner, four figures could be a huge budget. 

So when you're planning a budget and asking if it is even going to be worth it to run this Search campaign or not, I would say you should budget for at least 10 clicks per day. If you're not getting at least 10 clicks per day, with at least 10 people visiting your virtual storefront, in my opinion, it's just not worth all the effort. 

You can use Keyword Planner, again, to estimate how much 10 clicks per day would cost your business. If you're totally unsure, $2 CPC is sort of my starting point, $20 per day or $600 per month, but there are some industries where cost per click can be $10 or $15, and of course that would lead to a much larger budget per day even though that would still be considered a modest budget.

So if the business owner you're working with is not going to be able to get at least 10 clicks per day, maybe spend the money on something else and don't run ads at this time.

Next, use the full Responsive Search Ad and all assets (formerly known as extensions). This is a place where small business owners can really shine. Because you're not trying to manage hundreds of different campaigns, you're probably going to have one, maybe two campaigns with one, maybe two ad groups, so take the time to use all 15 headlines and all 4 descriptions. 

And if you're someone who's working with a small business owner, help them do that. Show them how to include their keywords, use Dynamic Keyword Insertion or Dynamic Location Insertion, if that's applicable, have calls to action and benefits.

And then moving on to your assets (extensions, as we used to call them), your sitelinks and callouts and structured snippets and image extensions and price and promotion - use as much of this stuff as you can, because most small business owners don't know that capability is there. Of course the bigger your ad, the bigger the real estate, the higher your click-through rate, the higher your Quality Score, and the better your results. 

Now the last two things are key metrics that I like to look at, at all budget levels, but especially when working with small budgets, and I think one is going to be a little bit more controversial than the other.

So first, Impression Share. Of all the times you could have shown an ad, how often did you show an ad? Personally, if I'm putting all this effort into running a Google Ads campaign, I don't like to have a Search Impression Share of less than 10%. It's not that it's bad. There are no bad metrics or good metrics, metrics are morally neutral. But it's just, if you're only showing an ad less than one out of every 10 times you could, you’ve put in a lot of effort for not much results.

So if you're finding your Impression Share is really low when you launch and you can't increase your budget, reduce your targeting. It's okay to have a campaign with just 3 keywords if you think those are the 3 keywords that are really going to drive your business.

I see so many small business owners (this happened in a coaching session yesterday) will set up a Google Ads account and go through Keyword Planner and are so proud of themselves and launch 150 keywords with $20 a day. We all know it is not the best use of time or resources, so start small, focus on improving your Impression Share, and just remember - if you're trying to improve your Impression Share and you're looking at whether you lost Impression Share due to rank or budget, those columns get really conflated if you're on a Maximize Bid strategy like Maximize Clicks, Maximize Conversions, Maximize Conversion Value. So with Impression Share, the key thing to look at is to make sure all the effort you're putting in is making a dent in the market.

And then Quality Score. I know there's been some debate on Twitter about this recently. Quality Score is a key component of the ad auction. It's a key component of Ad Rank and whether your ad shows and how much you're going to have to pay per click, because the higher your Quality Score, the less you're going to have to pay per click, and don't we all want to pay less per click?

Now, the Quality Score you see in your account, at the keyword level, is a diagnostic tool. Yes, but it's a super helpful diagnostic tool, and again, this is a place for small business owners and small-budget Google Ad spenders to really shine. 

I can tell you, the larger companies just throw money at the problem. They're spending so much money on their Google Ads, they are not spending the time to analyze their Quality Score and see if they can improve their Ad Relevance and maybe adjust their Expected Click-through Rate - they're just not focusing on it. But you can focus there and really work hard to improve that Quality Score so that you can pay less per click than the competition.

So these are a few of my little tips and tricks that I use when I'm running a Search campaign on a small budget for a small business owner.

Now of course, Search is the bread and butter of Google Ads. A part of Google Ads that I find people often forget about, is audiences. I love audiences. They're so powerful I actually have written a book that's 90% complete about Google Ads Audiences. It’s another project I'm trying to work on right now - but so so so powerful and yes, absolutely applicable, even at small budget levels. 

I want to share a few examples of how you can leverage audiences to make better use of a small budget in Google Ads.

First, you can use audiences to narrow your targeting of your Search and Shopping campaigns. When you add audiences to a campaign, you can add them on Observation mode,  meaning I want to show ads everywhere and observe if someone's on this audience list, or you can add audiences through Targeting, meaning I want to show ads when people are searching for these things and also match my audience requirements.

Here are two examples of ways that I've used Targeting functionality to narrow reach and increase ROI at a small budget. 

The first is with B2B. We know it can be challenging sometimes to discern just based on the keyword. Is this B2B intent? Is this B2C intent? What are they looking for? So adding some B2B audiences on Targeting to your Search campaigns means you're only going to show that ad for “accounting software” or “cloud storage” or whatever it is if the person searching is also a business professional, or in-market for payroll services, or in-market for business services. Adding some of these business audiences on Targeting mode can narrow the reach of your Search campaigns to make sure you're more likely to reach a B2B audience. It’s a great tactic to use, especially at lower budget levels.

Another way I've used this Targeting functionality before is with a Shopping campaign. I was working with a business that wanted to increase sales from repeat customers, and so what we did was we launched a Standard Shopping campaign, but we applied Targeting to All Website Visitors. What that meant is we would show ads when their previous customers were searching for things on Google, and we would show those Shopping ads just to pre-existing customers. It is the same business I mentioned before, it was a secondhand clothing business, so when people were searching for certain brands or certain things, you know, most people if they're searching for Gap or Old Navy, they're not actually looking for secondhand, they're looking for the fresh thing. But if it was a previous customer, someone who had shopped secondhand with this business before, and they were searching for Gap onesies or Old Navy baby pajamas, then we did want to show them a Shopping ad, and we were able to drive a great ROI by only Targeting Remarketing through a Shopping campaign.

So those are just two examples of how you can get creative with audiences to maximize a small budget.

Now if you are expanding beyond Search, I mentioned before my favorite format is Discovery - I think it's so underrated in Google Ads, image-based ads that only show on Google's own platforms - and a great way to use a small budget is to create a Custom Segment. 

For those who haven't done this before, this is something you can do in Google and I believe in Microsoft Ads as well, though I'm not an expert in that platform, where you create an audience based on things people have searched for, the types of websites they visit, or the types of apps they have on their phone.

There are two ways that I've used this with small business owners and small budgets. One was a company that wanted to reach other small business owners, and so we created a Custom Segment of people who had certain kinds of apps on their phone, and the apps that we chose were the Shopify app, Squarespace app, Wix app, and Sell on Etsy app. These were apps that only people who were small business owners would actually have on their phone. For example, if you shop at a store that runs on Shopify, you don't have the Shopify app on your phone, but a Shopify business owner would, so that was a great way for us to proactively reach small business owners.

And then another tactic we've used before is competitor targeting. It can be really expensive to try to target competitor keywords on Google Search, but you can create a Custom Segment of people who have searched for your competitors, and then show ads to them on Discovery, Display, and YouTube, just not in the moment of Search. So, a great tactic for smaller budget levels.

Lastly, I did mention this earlier, but I want to mention it again, gather insights from your customer list. Upload that customer list into Google Ads and see what insight Google can give you about your customer list, and use that to inform your targeting and messaging.

All right, I've given you four tips so far on how to maximize your minimal budget. The last thing I'd be remiss if I didn't say is it's a possibility that you might just not want to run ads, or that you might need to advise a business owner not to run ads. Not every small business is ready for Google Ads, and so there are three things that I always look for, that I wish I had known sooner when I first started my business helping small businesses grow. 

First, if a business has spent no time on their SEO, their website is not optimized, and they've never worked with an SEO expert before, I personally believe that they'd be better off starting by working on their SEO and then expanding into Google Ads.

Next is the budget. I mentioned earlier about 10 clicks a day is a bare minimum, general rule of thumb. If a business can't spend at least $600 a month for at least three months, they probably just shouldn't spend the money on ads and should spend the money elsewhere.

Then lastly, something I came up with is called the Rule of 2 to know if you're ready to run ads. The way this works is you just multiply your conversion rate times your average order value (AOV), which gives you something called your revenue per session, and in my experience, if that's not at least $2, you're not ready to run ads.

So let's say your conversion rate is 1%. Out of every 100 people who visit your website, one converts and your AOV is $200. That meets the Rule of 2, but if your AOV is $100, you are probably not ready to run ads.

Why? Well, as I said earlier, for a lot of small businesses who are not in these super competitive niches, I would say a $2 CPC is a reasonable expectation. So if you're spending $2 to bring someone to your website, and then making $2 in revenue when they land on your website… right? There's not much more wiggle room there, your profit would have to come from lifetime value in that example.

So back of the envelope math, if you're trying to help a small business owner decide if they're ready to run ads or not, if their conversion rate times their AOV does not equal at least $2, they should work on that first, and they're probably not ready to run ads yet.

So to recap, how can we drive big results with small budgets in Google Ads? 

First, you want to make sure you get your data foundation in place. Next, I recommend that you optimize for micro conversions so that the algorithm can have more data to learn faster. Then, 9 times out of 10, I do recommend starting with a Search campaign, the good old-fashioned

Search campaign. Don't forget to leverage audiences to get the most out of your budget, and don't be afraid to say, “You know what? We just might not be ready to run ads. Let's save this investment for another day or invest it in something else for now.”

Thanks for joining me for this special long weekend edition of Inside Google Ads. I'm your host Jyll Saskin Gales and I'll see you next time.

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