Ellipsis logo in black color

Getting More Leads for Less using Google Ads

Google Ads provides a number of great ways of finding new leads and customers for small local businesses. Producing good results with your Google Ads campaigns requires more than the just the right set of keywords and search terms. What makes it "successful" is the "strategy" behind it. In this post, we will go over some of the things that you should consider for keeping your Google Ads costs low, helping you generate leads profitably.

Keep Your Cost Per Lead From Google Ads in Control

When it comes to setting up a new Google Ads campaign, many marketers jump right into doing the technical stuff such as keyword analysis, competitor analysis, etc. Google Ads provides so many settings that often you lose track of the very reason why you started setting it all up! - to generate leads profitably. Before starting Google Ads, you should first decide how much you are willing to pay for generating a lead. If you have been running a business for some time you probably already know what your cost per lead should be. If you are just starting up, you should try to find this either through your network, local business support groups, or by just doing some basic cost analysis of your own business.

How to Calculate Your Cost Per Lead for Successful Google Ads Campaign

Calculating cost per lead is a "backwards exercise". Start by finding out how much your customer is worth to you. For example, if you run an insurance business and you are trying to find customers who are looking for auto insurance, and you also know that on average they'd pay $250/month on insurance, you can then calculate how much money your customer would spend in, say 5 years. In this case it will be $250 x 12 x 5 = $15,000. Assuming your margin is 5%, your customer would then be "worth" 5% of $15,000 = $750. Now, typically you'd like to keep your overall marketing cost somewhere around 5-10% depending on other business factors. That means your "cost per lead" should be anywhere from $38 to $75.

Once again, here's the math -

  • Target customer generated through Ads is looking for auto insurance
  • Willing to pay $250/month on auto insurance
  • Your margin is 5%
  • Customer will keep auto insurance for 5 years
  • Your "customer lifetime value" becomes = 250 x 12 x 5 x 5% = $750
  • Based on your business, you are willing to pay 5-10% of that amount to Google.
  • Your "cost per lead" becomes $38 to $75

Create Google Ads Copy That Resonates With Your Customer

A strong landing page with text and images that connect with your target customer will instantly help you generate more leads. Again, this exercise is better done by actually talking with your existing customers and knowing them in real life, not by doing keyword analysis and optimization. While Google's own tools will help you to some extent, if you really want to do a good job lowering your lead generation costs, you should absolutely spend some time understanding your target audience in real life and know what works for them and why should they buy from you. Here's a nice article from Google explaining how you can create a great Ad Copy - https://support.google.com/google-ads/answer/1704392?hl=en

Keep Refining Your Campaigns

Google Ads is not a "one time" activity. You can't just set it up and wait for leads to start coming in. You really need to keep refining your Ads on daily and weekly basis. Keep a careful eye on where your Ads are showing up because you'll notice Google will keep moving them around. Sometimes while you may be getting a good number of clicks, you just won't be generating any leads!


Google Ads can be one of the best channels for generating new leads for your business. Only if you can make that happen profitably. Talk to our Google Ads Experts Today!



Tags: google ads,leads,small business

Gautam Tandon

Related Posts

[2019-05-31] Ellipsis Google Ads Program for Local Businesses

[2020-06-17] Local Marketing with Google Ads

[2022-03-03] Four Marketing Tips for Senior Entrepreneurs

Recent Posts

[2024-07-09] The Untold Story of Andi Rosenberg and Her Hacked Shopify Site

[2024-07-02] How to Grow Your Small Business with a Freelance Website and Digital Marketing Team

[2024-06-27] How to Hire Local Website Designers: A Comprehensive Guide