How much should a small business spend on Google Ads?

It is the first question almost every business owner asks us: “How much should I spend on Google Ads?” The honest answer is that there is no magic number. But there is a sensible way to work it out, and it starts with your business, not with Google.

Start with what a customer is worth

Before thinking about a budget, work out roughly what a new customer is worth to you. A plumber who earns a few hundred dollars per job, with many customers coming back for years, can afford to pay more for an enquiry than someone selling a one-off $40 product.

Ask yourself three questions:

• What is the average value of a job or sale?
• How many enquiries do you usually need to win one job?
• How much of that job could you happily spend to win it?

If a typical job is worth $800 and you win one in every three enquiries, then paying $40 to $60 for an enquiry can be a very good deal. That simple maths tells you far more than any “average cost per click” chart.

Give Google enough budget to learn

Google needs enough clicks to find out which searches, times and locations bring you customers. If the budget is tiny, your ads only show a few times a day and you never get enough information to improve.

For most local service businesses, a starting budget that allows for at least a few enquiries a week is a good rule of thumb. If your budget can only buy two or three clicks a day, it is usually better to focus on fewer services or a smaller area than to spread it thinly across everything.

Your ad spend and management are two different things

With Google Ads there are two costs. The ad spend goes straight to Google for the clicks you receive. The management fee pays for the person or agency setting up and improving the campaigns. At EMC2 Online you always own your Google Ads account and pay Google directly, so you can see exactly where every dollar goes.

Our Google Ads management starts from $490 a month + GST, with setup and ad spend separate. The management tier is based on how much you spend each month, so a small business is not paying the same fee as a large one. You can see the starting points on our pricing page.

Track the right thing

Clicks are not customers. Before spending a dollar, make sure you can track the actions that matter: phone calls, form enquiries, bookings or sales. Without tracking, you are guessing, and it is impossible to know whether to spend more or less.

Good conversion tracking also helps Google itself. When it knows which clicks turned into enquiries, it gets better at finding more people like them.

Your website matters as much as your ads

Ads bring people to your website. Your website has to turn them into enquiries. If the page is slow, confusing or hard to use on a phone, you pay for clicks that go nowhere. Often the fastest way to “make Google Ads work” is to fix the page people land on. We cover the most common problems in our guide to websites that get visitors but no enquiries.

Give it time, then review

The first month is about learning. Expect to adjust keywords, add negative keywords (searches you do not want to pay for) and refine your ads. By the end of the second or third month you should have a clear picture of what an enquiry costs you, and whether it makes sense to grow the budget.

What about other platforms?

Google is usually the best starting point because people are actively searching for what you offer. Once Google is working, it can make sense to add Microsoft Ads (Bing and Copilot), Meta Ads on Facebook and Instagram, or even the new ChatGPT Ads. Our advertising overview explains how the channels compare.

Not sure where your numbers sit? Tell us a little about your business and we will suggest a sensible starting point, or book a meeting to talk it through.