How much should you spend on Google Ads?

A budget pulled out of the air can only ever be judged by whether it feels like a lot. A budget worked back from a sale can be judged by whether it pays. The arithmetic is short.

1. 01Write down what one customer is worth — the profit on a first job, or on a year of them if people come back.
2. 02Decide what share of that you are willing to spend to win them. A third is a common starting point for a business that wants to grow but not lose money.
3. 03Estimate how many enquiries it takes to make one sale, and how many clicks it takes to get one enquiry. If you don't know, assume one enquiry in twenty clicks and one sale in three enquiries until real figures replace the guess.
4. 04Divide the amount you can spend per sale by the clicks that sale takes. That is the most you can pay per click.
5. 05Decide how many sales a month you want, work out the clicks that needs, multiply by your cost per click, and divide by thirty for a daily figure.

Do it once on paper and the number stops being a worry. It becomes a target you can check against.

A trade business makes about A$600 profit on an average job and is happy to spend a third of that — A$200 — to win one. One in three quotes turns into a job, and about one in twenty clicks becomes a quote request.

If real clicks cost more than A$3.33, the campaign is not broken — it just means the other numbers have to improve: a better landing page lifts the enquiry rate, better quoting lifts the close rate, and tighter keywords cut the wasted clicks.

Less a minimum in dollars than a minimum in clicks. You need enough clicks each week to tell the difference between bad luck and a bad campaign. If your keywords cost A$5 a click and you spend A$10 a day, you are buying about fourteen clicks a week — too few to conclude anything for a month or more.

• Aim for enough daily spend to buy at least a handful of clicks a day on your best keywords.
• If that is more than you want to risk, narrow the campaign rather than thinning the budget: fewer keywords, tighter location, business hours only.
• A small budget spent on five exact search terms beats the same money spread across fifty broad ones.

Google spends against a daily budget but can run over on a busy day and under on a quiet one, settling over the month. So judge yourself on the month, and watch the pace during it: half way through the month, roughly half the money should be gone.

That pacing check is the whole reason a daily target matters. Being A$400 down at the three-quarter mark is not thrift — it is a campaign that stopped showing, and it is worth knowing the same week rather than at the invoice.

• Your cost per sale is comfortably under what you set — raise the budget while the cost holds.
• Your cost per sale is over, but the search terms are right — fix the landing page and the follow-up before spending more.
• Your cost per sale is over and the search terms are wrong — add negatives and tighten match types first; the budget is not the problem.
• You simply cannot service more work — leave the budget alone and raise your prices instead.