How Much to Spend on Google Ads

Work backward from the customers you want instead of picking a number and hoping. The most common question we hear is “what should I spend?” The honest answer depends on three numbers you can estimate yourself: how many new customers you want, how many leads it takes to close one, and what a lead costs in your market.

Step 1: Start With Your Sales Goal

How many new customers or jobs do you want from Google Ads each month? Start with a realistic number.

Step 2: Know Your Close Rate

Out of every 10 leads, how many become customers? If you close 3 of 10, your close rate is 30 percent.

Leads needed = new customers wanted ÷ close rate

Step 3: Estimate Your Cost Per Lead

Cost per lead depends on what a click costs and how many clicks turn into calls or forms.

Cost per lead = average cost per click ÷ conversion rate

Google Keyword Planner shows estimated click costs for your services and area. A well-built landing page with tracking in place helps your conversion rate.

Step 4: Do the Math

Monthly budget = leads needed × cost per lead

Subheading:

  • Goal: 6 new jobs per month
  • Close rate: 30 percent, so 20 leads are needed
  • Average cost per click: $6
  • Conversion rate: 8 percent, so each lead costs about $75
  • Budget: 20 leads × $75 = about $1,500 per month in ad spend

Then check it against what a customer is worth. If an average job brings in $2,000 in profit, spending $250 to get one customer is a strong return.

Tips Before You Launch

  • Set up call and form tracking first. Without it you cannot see your cost per lead.
  • Start with your most profitable services and your core service area.
  • Add negative keywords to block searches for jobs, free, DIY and services you do not offer.
  • Give a new campaign time to learn. Judge results after 60 to 90 days, not the first week.
  • Budget too small to get steady leads? Narrow the area or services before spreading it thin.

Frequently Asked Questions

Is there a minimum budget?

Google has no minimum. The budget needs to be large enough to bring in leads on a steady basis, or it is hard to learn what works.

No. Ad spend is paid to Google directly. Our package covers setup and management.

It depends on how many new customers you want, how many leads it takes to close one and what a lead costs in your market. Multiply the leads you need by your cost per lead to get your monthly budget.

Give a new campaign time to learn and judge results after 60 to 90 days, not the first week. Set up call and form tracking before you launch, because without it you cannot see your cost per lead.

Narrow the area or services before spreading the budget thin. Start with your most profitable services and your core service area, and add negative keywords to block searches for jobs, free, DIY and services you do not offer.