The short answer nobody likes
Google Ads costs whatever you decide to spend, and what you get for it depends on how much each click costs in your market. There is no minimum and no package price from Google. You set an average daily budget, and you pay for clicks (or, for some campaign types, for other actions) at prices set in an auction each time someone searches.
That is why the ranges you see online are useless. "Small businesses spend $1,000 to $10,000 a month" tells you nothing about what a plumber in Manchester or a dentist in Dallas should spend. So rather than give you another range, here is how to work out your own number.
How Google charges you
A few rules from Google's own help pages are worth knowing before you set a budget.
- You set an average daily budget per campaign. Google says to divide a monthly budget by 30.4 to get it. See About average daily budgets.
- On some days a campaign can spend up to twice its average daily budget, when Google sees more opportunity. Over a month it will not spend more than 30.4 times the average daily budget. Both rules are on Google's overdelivery page.
- You pay per click on Search campaigns. The actual cost per click is set by the auction and is usually below the most you are willing to pay.
So a daily budget of $50 means up to about $1,520 in a month, not exactly $50 every day. Plan your cash flow on the monthly figure.
The four numbers that set your budget
You need four numbers. Two you can estimate before you start, two you will only know properly after a few weeks of data.
- Cost per click (CPC): what you pay for one click. Estimate it with Keyword Planner, which shows the average cost of showing an ad for your keywords, inside a Google Ads account.
- Conversion rate: the share of clicks that become an enquiry, call or booking. This depends mostly on your landing page and your offer.
- Close rate: the share of enquiries that become paying customers. You know this already from your sales process.
- Value of a customer: what a new customer is worth to you in profit, not just revenue.
Turn the four numbers into a budget
The budget then follows from what you want to achieve:
- Leads you want per month ÷ conversion rate = clicks you need.
- Clicks you need × cost per click = monthly ad budget.
- Monthly ad budget ÷ customers won = cost per customer. Compare that with what a customer is worth.
A worked example (hypothetical numbers)
Say you run a home cleaning company and want 30 enquiries a month from Google.
- Keyword Planner suggests clicks for your main searches cost around $4.
- You expect a conversion rate of about 8% on a decent landing page, so roughly 1 in 12 clicks becomes an enquiry.
- 30 enquiries × 12.5 clicks each = 375 clicks a month.
- 375 clicks × $4 = $1,500 a month in ad spend, or about $49 a day.
- If you close 1 in 3 enquiries, that is 10 customers, at $150 each in ad spend.
If a customer is worth $600 in profit over the first year, $150 to win one is a good deal. If they are worth $120, Google Ads at these numbers will lose you money, and no amount of tweaking will fix that without a better conversion rate or a higher-value offer.
Every number above is made up for illustration. Swap in your own, or use our Google Ads cost calculator to run the maths.
What a budget that is too small looks like
The most common mistake we see is not overspending. It is spreading a small budget across too much.
If your budget buys 100 clicks a month and those clicks are split across six services and four cities, each combination gets a handful of clicks. You will never get enough data to know what works, and Smart Bidding has almost nothing to learn from. Our guide to AI-powered bidding explains why the system needs steady conversions.
With a small budget, narrow down instead:
- one or two services that make you the most money;
- the area you can actually serve well;
- the hours your phone is answered, if calls are the main goal;
- exact and phrase match keywords at first, so the money goes on the searches you chose.
Costs that are not the ad spend
The click cost is only one line. A realistic budget also covers:
- Management: an agency or freelancer's monthly fee, or your own time. Ask whether it is a fixed fee or a percentage of spend. Our guide to agency pricing models explains the trade-offs.
- Landing pages: a page built for the ad usually converts better than your homepage. That is a one-off cost.
- Tracking: conversion tracking, call tracking and a CRM connection. Without them you cannot tell which clicks became customers.
- Your sales time: someone has to answer the phone and call leads back quickly.
How to tell if the budget is working
Give a new campaign at least a month before you judge it, and longer if your customers take weeks to decide. Then look at four things, in this order:
- Are conversions being recorded, and do they match what reached your inbox or CRM? Our guide to Google Ads conversion tracking shows how to check.
- What are people actually searching? Read the search terms report and exclude what is irrelevant.
- What did each customer cost, not each click?
- Is the campaign limited by budget on the days that matter? Google shows this status in the campaign list.
If cost per customer is below what a customer is worth, you have a reason to spend more. If it is above, fix the conversion rate or the targeting before adding money.
When Google Ads is the wrong place to start
Google Ads works best when people already search for what you sell. If nobody searches for it yet (a new type of product, for example), you will be fighting for a tiny pool of searches, and social ads may build demand faster. Our comparison of Google Ads and Facebook Ads covers when each fits.
And if your website cannot turn visitors into enquiries, fix that first. Paying for clicks to a page that does not convert is the most expensive way to find out.