Google Ads For Supplements: How Much Should You Spend?
If you own a supplements store, you have probably noticed that its becoming more difficult every day to advertise on Google Ads.
One reason is that the pandemic forced many people to go out of their comfort zones and create e-commerce websites, hoping to capitalise on the trend. This pushed costs upwards.
Another reason is that in general, Google ads cost higher each year, with the avegrae rate increasing from $0.50 to $2.00 even $10 in some cases.
One of the most common questions we get is “how much should I be spending on Google ads to advertise my supplement store?
Lets examine this question and seperate facts from fiction.
This article will show you:
1. How to set clear goals when it comes advertising your supplements on Google ads
2. How you can calculate how much to spend
3. What to focus on to get a positive ROI (Return On Investment)
1. Set (VERY) Clear Campaign Goals
Ok, lets visualise this for a moment. Someone just handed you the keys to their yacht, to spend a month with your significant other. No questions asked.
You arrive at the marina, you jump on the boat and fire the engines. You steer your way out of the marina and on to the open sea.
And then you just get “down to business” . No autopilot, no skipper, no captain, you just leave the rudder alone and you just go for drinks at the lower deck.
Compare this situation with your Adwords account (now Google Ads).
Point is – if you do not know where you are going, how are you going to go there?
Your goals need to be very specific. Its not enough to simply say “I want more sales”!
So how do you get more specific?
Let’s look at an example:
Sam owns Berlin Supplements, an online supplement store based in Germany and offers a line of weight loss supplements for women. He wants to grow his supplement store through Google Ads.
Now, Sam knows he doesn’t have the time to learn Google Ads,, bidding strategies, conversion,-optimised copy, landing pages and email marketing (that fies after someone abandons or completes a purchase) and comes to Centis for help. Here are a few questions we would ask him about his goals, and some examples of how Sam might think through these:
1) What is your most popular or profitable supplement?
Now we didn’t tell you this, but Sam doesn’t want an arm and a leg on Google Ads. So asking this question to Sam is a great place to start when thinking about what campaigns to run. You don’t want to run ads for everything in the beginning because you’ll spread yourself too thin.
Example: Sam sells 20 different weight loss products for women, but his bestseller is the “Night Burn”. In fact, it’s also his most profitable. So Instead of trying to target everything, we can focus in on just the “Night Burn” .
2) Who is your best type of customer?
Most supplement stores have a few types of customers, some worth much more than others.
Example: For Sa,, the best customers are those who buy repeatedly and high ticket items. This customers are women, usually in the 35-55 range, do not have kids yet, and are working too much to go to the gym to exercise. Now we’re really honing in on who we want to attract.
3) What is your close rate?
If you get 10 visitors, how many turn into an actual sale?
Sam knows that if he gets 10 visitors and they are mostly qualified, 2-3 end up uying So on average a 25% close rate.
4) How many orders can I handle per month?
You’re probably thinking “unlimited!” but think more realistically. How much time can you or your team dedicate to selling and fulfilling the products per month?
Example: Sam and his team can realistically handle 500 orders per month right now, and could outsource to a fulfilment company in the future if more customers are coming in.
5) How much is an average customer worth?
Ok, we are near the moment of truth. You need t carefully think about this one and it makes it much easier to ease your mind after that. How much could you spend to acquire 1 customer and break even?
Example: One unit of the “Night Burn” goes for €59 and Sam has pretty good profit margins, so a single good customer could be in the $40 profit range. If he spent $40 to acquire 1 customer he would break even.
6) How much is the average lifetime value of a customer?
And here is the million-dollar quesion. Most online supplement owners cannot really answer that. This question means, how much could you spend to break even on the lifetime spend of a customer (If you don’t have cash flow issues – this is the way to really think to win.)
Example: Sam knows that once he establishes a relationship with someone who buys, he can really sell more of the same or offer different complementary products. On top of that, his customers refer his product to their friends, because the supplement works.. Sam was wise enough to set up a referral system so this makes it easy for his customers to refer his product and website.
Thinking like this can really clarify what you’re looking for and get really specific with your goals.
The actual work: Setting Your Goal
Now that we have all this information, Sam might say –“My goal is to generate 20 leads per day for the Night Burn supplement in Berlin alone.”
I know that if I get 20 leads, at least five of them (25% close rate) will purchase the product. I can only handle 1000 sales per month, so I will be just slightly over capacity (which will be a great thing!).”
Now that we have specific goals were able to focus on a targeted ad spend and calculate ROI.
ROI is your metric, NOT CPC
Are you one of those people who think that when you advertise on Google, your goal is to get the most leads for the cheapest price possible?
If yes, think again.
But of course and you want the best ROI possible. No doubt about it. Obviously, you don’t want to overspend, but the goal is NOT to get the most leads at the lowest price.
Lets repeat that: your goal is NOT to get the most leads with the lowest price.
What you must learn to want, is to bring in the most qualified lead, someone ready to buy. If this lead costs a bit more, so be it.
So what we would advise you is to focus on “High Intent” keywords where your chances of selling to the lead is maximised.
Now instead of focusing on purely the number of leads, or the pure cost, we’re focused on the big picture.
To bring this full circle lets take our initial goals above work backward to find our target ad spend.
Love maths? Well, you should.
In the supplements world (and in many other industries), the most successful (and usually large) supplement companies are advertising with the intent of breaking even or lose money on the front end, but make all their money on the back end.
Now, this doesn’t have to be the case for your business as long as you have a proper plan in place, a great follow up system, and a USP (Unique Selling Proposition).
Let’s take a look at how much Sam would need to spend to get 20 new leads in the next 30 days.
Ad Budget By Conversion Goal
Lets work backwards (hey, it works!) Sam would start with the number of leads that he wants to get and then figure out how much it will cost to acquire those leads.
Each time you work on this formula, know that this is a rough estimate – unless you know your numbers (but this blog post assumes that you do not – sorry!)
Here’s the formula you can use:
(Number of Leads x Avg CPC) / Conversion Rate = Est. Monthly Ad Spend
|Monthly Goal Of Leads||20|
|Average Cost Per Click||$9|
|Average Landing Page Conversion Rate||10%|
|Monthly Adwords Spend Necessary||$1800|
So Sam needs about $1,800 in ad spend to get on average 20 leads at an average CPL of ~$90.
Let’s look at the potential revenue from these leads based on the close rate and the average purchase price.
We can use the following formula to calculate estimated revenue:
(Leads x Close Rate) x Average Purchase Price = Revenue
(20 Leads x 25% Close Rate) x $25,000 = $125,000
If you’d like to take it a step further and understand your ROAS (Return on Ad Spend), we can use the formula:
Revenue / Cost = ROAS
125,000 / $1800 = 6,944% ROAS
In this example, we essentially spent $1,800 to acquire $125,000 in revenue.
This is the power of clearly defining your goals and taking a holistic, strategic approach.
If you want to run a real life example, you can check out our free ROI calculator here, in our Free Resources section.
Optimise, Optimise, Optimise
When starting with Google Ads, you should start with conservative numbers as above, and then optimise the campaigns based on what data you receive. This can be keyword suggestions, optimisation score and much more.
When you delegate your Google Ads to Centis, you get daily optimisation strategies, deep keyword research, and modeling what other competitors are bidding on. Sometimes, it pays to outsource tasks where you are not proficient with to generate the most profit 🙂
Speaking about optimisation, there are many methods of adjusting campaign performance based on the data your receive.
Here are a few strategies to implement to scale your campaigns:
Expanding Keyword Sets
When starting your campaigns, you need to understand the proper structure to avoid issues with Google. A proper setup from the start and a healthy mix of different high intent keywords will help your CPC to average out and normalise.
You can realistically see a 10, 20, or even 30% drop in CPC when strategically expanding to a variety of high intent keywords.
As real data and leads roll in, we can make decisions on what kinds of keywords to keep or cut based on conversion rates and qualitative data like lead quality.
Adding Negative Keywords
When creating your campaigns, you DO NOT WANT certain keywords to be clicked on.
These are any searches that you will find in the search term report that are irrelevant to your supplements business.
For example, if Sam would bid on weight loss, and he seels a supplemnt, he would add these keywords as negative:
burn calories belt
weight loss scale
weight loss fitness program
weight loss app
Here, we can explicitly eliminate people searching for these terms and not pay for any of these types of clicks.
More Optimising: Split-testing Ads
Split testing means that wwe produce two or more ads, with different headlines, and different etx (copy) and see which one works best.
This alone will drive the CPL (Cost Per Lead) down but it takes enough testing and data to perform a proper test.
After you see enough leads come in through the account, will be able to start eliminating certain age ranges, incomes, genders, and even locations on where we see little or no conversions.
For example, in Sam’s example, he sees that most people who click adn become customers are women, aged 35-45. Only 5% of women below the age of 35 convert, so Sam quickly eliminates this group from seeing his ad and realocates the budget to this age range.
Also, Sam sees that some neighborhoods in Berlin do not convert at all. This allows him to cut his spending drastically, and also start expand to near by cities.
Landing Pages Tests
Having a great landing lage means that your conversions will go through the roof. At the same time, you CPL will dramatically fall and only comes after a campaign is running well and producing quality leads.
Centis’ 15 years experience in conversion optimisation has allowed us to test and focus on CRO best practices so you can realise a 5-10%+ increase in conversions when testing offers, designs, and landing page elements.
Next time you’re planning your marketing budget or planning your next advertising campaign, remember these simple steps:
- Set Clear Goals
- Focus on ROI
- Take A Mathematical Approach To Ad Spend
- Optimize & Scale Your Campaigns
If you focus too much on getting the lowest CPC, you’ll likely miss out on achieving a successful campaign.
Once you have clear goals and look at the larger picture, you have many more levers to pull to obtain a positive ROI.
Again, f you’d like to test your ROI on Google Ads, check out our FREE PPC Calculator and get a clear idea of what you can spend!