Google Ads: How Much Should I Spend?

If you’re a business owner, you’ve probably considered running Google Ads to attract more customers. But there’s one tricky question: How much should I spend?

Spending too little might mean your ads don’t get enough visibility, while spending too much without a clear strategy can feel like throwing money away. The good news? You don’t need a huge budget to make Google Ads work—you just need a smart budget. Here’s how to budget for Google Ads effectively without wasting ad dollars.

1. Start with Your Goals

Before setting a budget, define your goals. Are you looking to generate leads, drive e-commerce sales, or increase calls to your business? Your budget should align with these goals.?

For example, if your goal is lead generation, determine how much a lead is worth to you. Or, if you run an e-commerce store, understand your profit margins and target return on ad spend (ROAS).

Additionally, consider the geography of your campaign. The size of your target area impacts how much you need to spend. A local business targeting a single city may need a much smaller budget than a company running a statewide or national campaign. If you're targeting competitive metro areas, you may need a higher budget to compete with other advertisers bidding for the same audience.?

So make sure you define your geography to ensure your budget is set right for your market reach.

2. Understand Google Ads Costs

Google Ads operates on an auction system, meaning costs vary based on competition, industry, and targeting. Some industries (like legal or insurance) have high cost-per-click (CPC), while others (like local services) can be more affordable.?

For example, local services might cost $1 - $5 per click. And B2B or professional services might cost $5 - $20 per click. The good news is that you can do keyword research before you start your campaign and get a pretty clear idea of which keywords you should buy and how much they cost.

3. Calculate Your Starting Budget

A simple way to determine a starting budget is:

(Estimated Cost/Click) x (Desired Clicks-Per-Day) x (Days in a Month) = Monthly Budget

For example: If the average Cost/Click in your industry is $3 and you want 10 clicks per day, your daily budget would be $30. And over a 30-day month, this equals $900/month.

4. Focus on the Right Keywords

One of the biggest mistakes in Google Ads budgeting is wasting money on the wrong keywords. Use these strategies to avoid that:

• Start with keyword research to create a batch of reasonably priced search terms to start with. Keyword research tools like Google’s Keyword Planner can help identify the best terms for your budget.

• Use negative keywords – Exclude terms that don’t match your business (e.g., “free” if you don’t offer free services).

• Target high-intent keywords – Prioritize searches with strong buying intent (e.g., “best plumber near me” instead of just “plumber”).

5. Optimize Your Ads and Landing Pages

If you’re paying for clicks, you want those visitors to convert into leads or customers. That means optimizing your ads and landing pages:

• Write compelling ads – Include clear benefits, strong calls to action, and relevant keywords.

• Ensure fast-loading website pages – A slow website kills conversions.

• Make it easy to contact you – Include a phone number, form, or chat option.

A well-optimized campaign can turn a modest budget into a powerful lead generation machine.

6. Monitor, Test, and Adjust

Google Ads isn’t a “set it and forget it” platform. To avoid wasting money, check these key performance metrics regularly:

• Click-through rate (CTR) – A low CTR means your ads aren’t compelling enough.

• Conversion rate – Measures how many clicks turn into leads or sales.

• Cost-per-conversion – Helps determine if your budget is being spent efficiently.

If something isn’t working, adjust your keywords, ad copy, or targeting settings until you find a winning formula.

Final Thought: Spend Smart, Not Big

You don’t need a huge budget to make Google Ads work—you just need a well-planned strategy. By setting clear goals, understanding costs, choosing the right keywords, and optimizing your campaigns, you can get the most out of your ad spend without wasting money.

Ready to Get Started?

If you want expert guidance on running Google Ads without wasting money, let’s talk. Click here to schedule a consultation and start growing your business today.