What Are the Basics of Google Ads Targeting Settings?

The basic principle of Google Ads targeting is to show users ads that are relevant to them. This can be achieved through methods such as keyword targeting (showing ads based on the terms users search for), audience targeting (delivering ads based on users’ behavior and interests), and geographic targeting (targeting users in specific regions). By combining these methods, you can deliver ads to your target audience with high precision.

How do I choose effective keyword targeting in Google Ads?

To choose effective keyword targeting, it’s important to keep the following points in mind. Understand user intent: Consider the user intent behind each search keyword and select keywords based on that intent. Check search volume and competition: Research keyword search volume and competition levels, and select keywords with cost-effectiveness in mind; Set up negative keywords: To avoid wasted clicks, set up negative keywords for irrelevant searches. By utilizing these strategies, you can select keywords that perfectly match your target audience and improve your click-through rate (CTR) and conversion rate (CVR).

How can I use audience targeting?

Audience targeting is a method of delivering ads based on users’ browsing history and interests. It can be utilized in the following ways: In-market audiences: Target users with a high intent to purchase and display ads to them; Remarketing: Re-target users who have previously visited your website; Lookalike audiences: Target users who exhibit similar behavior patterns to your existing customers. By utilizing these methods, you can deliver ads to users who are more likely to be interested in your products or services.

What are the best bidding strategies for optimizing Google Ads performance?

Google Ads primarily offers the following bidding strategies: CPC (Cost Per Click): The amount you pay each time your ad is clicked; CPA (Cost Per Acquisition): The amount you pay when a conversion (such as a purchase or sign-up) occurs; ROAS (Return on Ad Spend): An automated bidding strategy that optimizes based on revenue goals; Maximize Conversions: A strategy designed to achieve the maximum number of conversions within your budget. Selecting the strategy that best suits your campaign’s goals and budget will help improve performance.

HOME› BLOG ›Ad Campaign Management

Ad Campaign Management

[Easy to Understand Even for Beginners] The Complete Guide to Planning Your PPC Ad Budget

Sayo Yoneda Last Updated: July 17, 2025

The Basics of Setting Budgets and Determining Costs for Search Ads

For those who are just getting started with search ads,
"How should I set my advertising budget?"
The question of “What is an appropriate daily budget?” is a common one.

In particular, if you don't have a sense of the costs involved, you might end up wasting your advertising budget, or
Conversely, there is a risk that the budget will be too small to generate sufficient conversions.

In this article, to make it easy to understand even for those who are just starting out with search ads,
We’ll provide a detailed explanation, covering everything from the basics of setting a budget to specific calculation methods and even the approach to initial testing.

If you use this article as a guide, it should help ease your concerns about setting a budget and enable you to manage your finances more effectively.

Setting Budgets and Billing for Search Ads

How to Set a Daily Budget and How Billing Works

First, let’s take a look at how to set a daily budget for search ads and how the final bill is calculated.

In search ads,You can set a daily budget for each campaign in Google Ads and Yahoo! Ads.。

Although you cannot set a monthly budget directly, your monthly bill will be calculated based on your daily budget—unless you change it during the month—

"Daily budget × 30.4 (average number of days)"

The amount will never exceed the amount derived from the formula.

Also, how often your ads are displayed depends on your daily budget,
This varies depending on keyword volume and the size of your target audience.

How Over-Delivery Works

With search ads, you can set a daily budget for each campaign on both Google Ads and Yahoo! Ads.

Although you cannot set a monthly budget directly, your monthly bill will never exceed the amount calculated using the following formula.

"Daily budget × 30.4 (average number of days)"

This system enables stable ad delivery while preventing excessive costs.

In addition, the frequency with which ads are displayed depends on the daily budget you set, the search volume for keywords,

This may vary depending on factors such as the size of the target audience.

There may be times when ads are served beyond the daily budget you've temporarily set, but

There are limits for each platform, so we won't go significantly over budget.

How Over-Delivery Works

Specifications regarding overdelivery vary by advertising platform.

I have summarized the key points in the table below.

	Maximum Amount for Excess Deliveries	Amount Billed
Google Ads	Deliver up to twice the set daily budget	The monthly billing amount will never exceed the budget for the set date multiplied by 30.4.
Yahoo! Ads	There may be cases where the daily budget is significantly exceeded	If the daily expenditure is two or more times the daily budget, the daily expenditure is calculated as 200% of the daily budget.

Reference 1:Google Ads Help: About Campaign Budgets

Reference 2:Yahoo! Ads Help: Adjusting Daily Budgets and Monthly Costs for Search Ads

With Google Ads, ads may be served up to twice the daily budget, but
When viewed on a monthly basis, the total will never exceed the monthly budget based on the daily budget you set.

On the other hand, with Yahoo! Ads, there is a risk of significantly exceeding your daily budget, so you need to be especially careful.

How to Set an Appropriate Daily Budget for Search Ads

"How much should I set it to at first?"
"Business is going well right now, but by how much should I increase the daily budget?"

So, how should you determine the daily budget for search ads?

1. How to Set a Monthly Budget

With search ads, you first set a monthly budget, and
It is common practice to calculate the daily budget based on that.

The method for setting a monthly budget varies depending on the desired results.

Here, we will mainly introduce the following two methods.

(1) How to Calculate Based on the Desired Number of Conversions

For example,

Monthly Conversion Goal: 100
Target CPA: 8,000 yen

In this case, the monthly budget is calculated as follows: 100 CV × 8,000 yen = 800,000 yen (monthly budget)

Furthermore, the daily budget is calculated using the following formula: 800,000 yen ÷ 30.4 = 26,315 yen

A round number25,000 yenや26,000 yenIt might be a good idea to set it that way.

This method is suitable when you want to set specific outcomes as your goals.

By the way, the target CPA can be calculated as “LTV × gross profit margin.”

Although the method for calculating LTV varies by industry,

If"LTV for Subscription Services"If you're not sure how to calculate this, please refer to the article below.

Hide&Seek Co., Ltd. | Hide&Seek

I want to share the wonderful things hidden in the world.

Hide&Seek Co., Ltd. | Hide&Seek

(2) Method of Calculation Based on the Monthly Sales Target

For example,

Monthly Sales Target: 1 million yen
Target CPA: 8,000 yen

In this case, the required monthly CV is as follows: 1,000,000 yen ÷ 8,000 yen = 125 entries

Furthermore,

CVR (Conversion Rate): 2.0%
Average cost per click (CPC): 50 yen

In this case, the number of clicks required: 125 CV ÷ 0.02 = 6,250 clicks

The monthly budget is as follows: 6,250 clicks × 50 yen = 312,500 yen (monthly budget)

The daily budget is 312,500 yen ÷ 30.4 = 10,279 yen

A round number10,000 yenIt is also appropriate to set it to this value. This method is suitable when you want to set a budget based on sales targets.

*Formula: "Sales Target Amount ÷ Target CPA ÷ CVR × Average CPC = COST"
┗The original formula is “Clicks × CPC = COST.” .
The cost per click varies depending on the size of the market in each industry, the level of competition, and the appeal of the product, and
Even if the industries are different, if the conversion rate (CVR) is the same, a higher cost-per-click (CPC) will require a larger budget, so
Let's keep that in mind, too.
Also, at Google,Keyword PlannerIt even calculates your budget for you, so be sure to give it a try.
Now that you understand how to set a monthly budget, I’ll move on to explaining how to set a testing budget.

2. How to Determine a Testing Budget

Despite its poor cost-effectiveness during operation,
You wouldn't keep running ads until you've used up your monthly budget, would you?

Once you start running ads, you should assess the return on investment based on the initial results.

Therefore, to determine whether it is cost-effective or not,You need to set the testing budget in advance.

Here, we’ll introduce two methods for determining a testing budget.

(1) A method based on the number of days in the testing period

For example,

Monthly budget: 900,000 yen
Test period: 5 days

In this case, 900,000 yen ÷ 30 × 5 = 150,000 yen (testing budget)

(2) A method based on a fixed percentage of the monthly budget

For example,

Monthly budget: 1 million yen
Test Budget: 20% of the monthly budget

In this case, 1 million yen × 0.20 = 200,000 yen (testing budget)

When setting the testing budget,
It is important to clearly define the distribution period and the purpose of the test.

This makes it easier to collect useful data right from the start of operations.

Examples of How to Use the Testing Budget

How the test budget is used varies depending on the operator’s policies and distribution strategy. Specific examples are listed below.

Example 1: Spent 150,000 yen in 5 days, exceeding the daily budget by30,000 yenSet it to .
Example 2: Spend the entire 150,000 yen in a single day and analyze the results over a short period.

Both methods are appropriate, but if you have the time, we recommend conducting an A/B test over several days to collect more data. On the other hand, if you need to perform an analysis in a short period of time, you’ll need to prepare multiple creative and targeting options in advance.

In addition, flexibly adjusting daily budgets and delivery settings based on test results is key to successful campaign management.

Summary

The best approach to setting a budget for search ads varies depending on your target outcomes and the size of your business.

In the early stages, it is important to conduct a pilot program and optimize budget allocation based on actual data.

In addition, by flexibly revising our strategy while analyzing cost-effectiveness during the testing period, we can
This can increase the success rate of your ad campaigns.

If you have any questions or concerns regarding the management of your search ads,

Please feel free to contact us.

Our experienced staff is here to help you optimize your advertising campaigns.

Author

Sayo Yoneda

I work in the Web Consulting Division. I handle all aspects of web advertising, from creating landing pages to managing campaigns. I’m constantly learning.