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There isn’t a single Google Ads budget that makes sense for every business. A small local business and a national company can be targeting completely different markets, with very different levels of competition and very different values attached to each new customer.
That’s why simply asking how much you should spend each month doesn’t really tell you much. The better question is what you’re trying to achieve with the campaign and whether the numbers make commercial sense once enquiries turn into actual customers.
For some businesses, a relatively modest monthly budget can produce a steady stream of worthwhile leads. In a competitive industry where a single new customer is worth thousands of dollars, a much larger advertising budget may still make sense.
Start With the Value of a Customer
Before setting a budget, it helps to work backwards from what a new customer is worth.
Say a business provides a service worth $2,000 and has a reasonable profit margin. Paying to acquire a new customer may be perfectly sensible if the cost of generating that customer is substantially lower than the profit they bring in.
The same logic applies whether you’re a plumber, lawyer, dental practice or commercial service provider. The value isn’t really in the click itself. It’s in what happens after that click.
This is why businesses should be careful about judging a Google Ads campaign purely by how many clicks it receives. Ten clicks that produce two genuine enquiries can be far more valuable than a hundred clicks that don’t lead anywhere.
Your Industry Makes a Big Difference
Google Ads costs vary significantly depending on what you’re advertising.
Some industries have relatively low competition for certain searches, while others have businesses bidding aggressively for the same customers. Legal, financial, medical and some home service industries can be particularly competitive because each new customer can be worth a substantial amount to the business.
Location also matters. A campaign targeting one Australian suburb is obviously going to behave differently from one targeting an entire state or the whole country.
This is one reason we don’t recommend choosing a budget based on what another business happens to be spending. Their market, customers and conversion rates could be completely different from yours.
More Budget Doesn’t Automatically Mean More Customers
Increasing an advertising budget can increase exposure, but it doesn’t automatically make a campaign better.
If the keywords are wrong, the ads are attracting people who aren’t ready to buy or the landing page isn’t converting visitors, putting more money into the campaign simply means spending money faster.
The campaign itself needs to be monitored and refined.
Search terms need to be reviewed, poor-performing keywords removed and budgets adjusted towards the areas producing worthwhile enquiries. Sometimes the best improvement comes from spending less on the wrong traffic rather than spending more overall.
Your Website Still Matters
Google Ads gets someone through the door, but your website has to convince them to stay.
A potential customer who clicks an advertisement and finds a confusing website may simply go back to Google and choose another business. That’s why landing pages, service information, reviews and clear contact options all play a role in the performance of an advertising campaign.
This is also where Google Ads and SEO can work well together. A strong organic presence can reinforce the credibility of a business when someone sees its advertisement, while paid search can help generate traffic while organic rankings are still developing.
There Is No Magic Monthly Figure
The right Google Ads budget comes down to the economics of the individual business. How competitive is the market? What does a customer typically spend? How many enquiries turn into customers? How much capacity does the business actually have?
Once those numbers are understood, the budget becomes much easier to work out.
At Kick Media, we manage Google Ads campaigns for Australian businesses with the focus on generating genuine enquiries rather than simply chasing clicks and impressions. If you’re unsure whether your current budget is too high, too low or simply being spent in the wrong places, get in touch through our contact page and we can discuss what makes sense for your business.
