The short answer
Google Ads has no minimum spend: you pay when someone clicks, at prices set by auction. What matters is whether your budget buys enough clicks, at your market’s prices, to produce enough enquiries to learn from. Estimate it from the cost per click and your likely conversion rate, add management and set-up costs, and give it several weeks before judging.
In this guide
Google Ads is the most common place small businesses start paying for advertising, and the most common place they lose money early. Usually that’s not because the budget was too small in absolute terms, but because it was too small for the market it was spent in, or spread too thin to learn anything.
What you actually pay for
With search ads you choose the searches you want to appear for, and pay when someone clicks. This is why it’s called pay-per-click (PPC). The price of a click — the cost per click (CPC) — is set by an auction each time someone searches, and depends on:
- Competition. How many other advertisers want the same search, and how much they’re prepared to pay.
- Location. The same search costs different amounts in different countries and cities.
- Relevance. Google rewards ads and landing pages that match the search well.
- Timing and device. Demand and prices shift through the day, week and year.
There’s no minimum spend, and you set a budget per campaign. Google treats it as an average: on busy days a campaign can spend up to twice its average daily budget, balanced by quieter days, and for most campaigns you won’t pay more than about 30.4 times the daily budget in a month. Google explains its spending limits here (opens in a new tab).
Estimate a budget in four steps
- Find your searches and their prices. Google’s free Keyword Planner (opens in a new tab) shows estimated monthly searches and costs for the keywords you choose, in the locations you choose. To use it, you need a Google Ads account with your billing details entered.
- Estimate your conversion rate — the share of clicks that become enquiries or sales. Use your own website figures if you have them. If you don’t, be cautious.
- Work out the clicks you need: target enquiries ÷ conversion rate.
- Work out the budget: clicks needed × average cost per click.
Illustrative example. Invented figures in US dollars, to show the method — your costs and conversion rate will differ.
A roofing company wants 20 enquiries a month. It expects about 5% of clicks to enquire, so it needs 20 ÷ 0.05 = 400 clicks. If its keywords cost around $6 a click, that’s 400 × $6 = $2,400 a month in ad spend, before any management fee.
Then sense-check it against what a customer is worth. If each enquiry costs $120 and one in four becomes a customer, each customer costs $480 in ad spend. Is that affordable? How much to spend on marketing explains how to decide.
Don’t reuse another market’s numbers
Cost per click varies widely between countries, cities and sectors. Articles quoting “average” costs are usually drawn from one market — often the US — and may not reflect yours. Set your location in Keyword Planner, work in your own currency, and replace estimates with your own data as soon as you have it.
Why small budgets often fail
A small budget can work, but only if it’s concentrated:
- Too few clicks to learn. If the budget buys 60 clicks a month and 5% convert, you get three enquiries — too few to tell good keywords from bad ones.
- Spread too thin. Dozens of keywords, a wide area and several campaigns split a small budget into fragments that never gather enough data.
- Paying for the wrong searches. Without negative keywords — searches you tell Google to exclude, such as “jobs” or “free” — some budget goes on people who were never going to buy.
With a limited budget, focus on your highest-intent searches, a tight geographical area and one clear offer, then widen once it’s working.
The other costs
- Management. If an agency or freelancer runs the account, expect a percentage of ad spend, a flat monthly fee, or a mix. See what agencies charge for the models and UK prices.
- Set-up. Account structure, conversion tracking and call tracking often cost extra up front.
- Landing pages. Sending clicks to your homepage usually wastes some of them. A page that matches the search is often the best improvement available — see why a website gets visitors but no enquiries.
- Your time, for approvals, answering enquiries and reviewing results.
Give it long enough
Judge a new campaign on cost per enquiry after enough clicks to mean something, not on the first week. Expect some wasted spend while the account learns which searches convert. Agree in advance what cost per enquiry would count as success, and when you’ll decide.
When Google Ads isn’t the right channel
If very few people search for what you sell, or clicks cost more than an enquiry is worth to you, no amount of management will fix the maths. Paid search or paid social and which channels suit your business cover the alternatives. For advice on your own account, see paid search advice.
What to do next
- Use Keyword Planner to list your highest-intent searches and their estimated costs in your area.
- Estimate your conversion rate conservatively and calculate the clicks you need.
- Check the resulting cost per customer against what a customer is worth.
- Set up conversion tracking — including phone calls — before you spend.
Apply this to your business
Work out your PPC budget
Tell askBizly what you sell, where, and what a customer is worth. It sets out the ad spend and management costs your plan needs, what your budget can realistically buy, and the assumptions behind each figure.
Free to use. Create a free account when you want to save your plan and come back to it.