What Should Your Google Ads Budget Be?

Google receives about 70,000 searches a second. That means, in just the few moments it’s taken you to read these 20 words, hundreds of thousands of internet users have pressed “enter” on their keyboards and are scrolling through the search engine results page.

Even if your website isn’t in the top ten search results, you can still appear high on search rankings by using Google Ads. Combine your well-thought-out business strategies with the right ad budget and you can gain some serious traction for your company.

But what amount is the right amount to spend on Google Ads? It depends. While the end budget will vary from company to company, every business should consider the following factors when determining how much to spend on Google Ads.


If you’re new to Google Ads, it’s best to start small. Anywhere from $10 to $50 a day is a good place to start, but $500 a month is when you’ll be able to notice that ads are making an impact.

$1000 is what we like to call the magic number – you’ll start to see higher clicks, conversions, and leads. If you’re a one-person operation, you may want to begin with less. If you’re in the process of expanding your 12-person facility into a 50-person one, your number could be different.

Don’t let a lack of experience with Google Ads make you think that you’re obligated to start with a budget of $1 or $2 a day. It’s better to jump in with at least a few hundred dollars a month so that you can make adjustments to your ad strategy as soon as possible.

Cost-Per-Click Limit

When you’re paying for Google Ads, one data point you’ll have access to is your cost-per-click. This is the amount you have spent on a user who has clicked on your advertisement.

How much are you willing to spend for one click? 20 cents? $3? Some companies in some of the most competitive industries may be willing to spend $50 per click or even per view, but the average is about $1 to $2.

And keep in mind that a click doesn’t always guarantee a new lead, so you’ll have to factor that into your budget. Would you rather set your maximum cost-per-click to a higher amount that will target better customer matches? Or would you rather go with the approach of a lower cost that may reach more people?

Google Analytics

Google Ads will tell you how many clicks or impressions your ad has received, but it won’t give you specific information on the number of conversions from those ads. And if you don’t know what your returns are, it will be difficult for you to set an effective budget.

To get insight into the actions that customers take on your website, link your Google Ads account to your Google Analytics one. You’ll have access to a host of helpful information, like the amount of time visitors are spending on your website after they click your ad or the number of purchases they end up making.

Having this information can help you to see if your keywords are effective or if you need to adapt your advertising strategy.


Your location plays a role in determining your ad budget because you have to decide the size of the population you are trying to reach. If you’re a small pizza restaurant located on Ocean Drive, you could use your ads to target Ocean Drive searches, Miami Beach searches, Miami searches, Florida searches, and even U.S. searches for pizza places.

But an ad appearing for a U.S. pizza search won’t be nearly as effective for lead generation as one that’s set to Miami Beach. That’s because people who are looking for a pizza restaurant within your city are most likely close enough to visit.

Edit your ad settings so you’re only showing ads to people close by. You’ll be spending your budget more efficiently, and you might even end up changing it. It may be cheaper to advertise locally since a more specific keyword isn’t as competitive.

Campaigns for Google Ads

Another factor to consider for your budget is the number of campaigns you’ll run. Instead of creating a one-size-fits-all ad, it’s best to create different ad campaigns that send viewers to different pages of your website.

For instance, say you’re an office supply company creating campaigns for the month of August. Instead of making one campaign that sends all advertisement clickers to your home page, create multiple ones for different audiences.

You can create a back-to-school campaign that takes visitors to a page on your website selling school supplies. Another campaign could be one directed at teachers who need a one-stop way to purchase all of the items for their classrooms.

You could even appeal to executives looking for new office gear by sending them to a custom order form for items such as calendars, pens, and stationery.

Consider how many campaigns you’re willing to fund. If that number is significantly less than all of the categories of products you offer, do some research into what pages of your website you’re going to target that will be most likely to generate new customers.

Begin With an Ads Manager

Want that $500 a month to even further? Begin your Google Ads campaigns with a Google Ads manager. With our expert help, you’ll see clicks turn into conversions much more quickly.

No matter the size of your business, setting a budget for a Google Ads campaign is the right move. Any amount you spend is a step in the right direction toward a more digitally savvy company.

5 Assumptions About Ad Rank That Are Outdated

Assumption 1: Your ad position on Google is based on how much you’re paying.

Not necessarily true. Your position on Google is based on more than just how much you pay. Your bid only consumes only half of the formula. Sometimes your quality scores are so bad that you’ll never show above your competitor no matter how much you bid.

Assumption 2: Ad position is based on “Bid x Quality Score”

Don’t come banging on my door if your quality score is awesome and your bidding at the top. This is just a factor in positioning. Ad rank threshold also measures into the equation. This threshold can influence how much you pay over time and for position. Where can you find it? You can’t. No one knows. Google knows what your competitor is will to pay. So, Google knows you’re willing to pay a little more for your leads, or a “minimum price.” Cheap clicks are starting to disappear. Every threshold is different for each auction. If you know someone paying for a particular keyword, that doesn’t mean you’re going to pay the same. For example, if a lawyer is willing to pay $1000/click, the threshold isn’t going to be $1000, but will also not be $20. It may start around $50. This means the $2 bid may not be shown in a relevant position. Google knows you’re willing to pay more.

Assumption 3: My bids should be low because there are very few or now other ads.

Well, ad threshold takes care of this. You ad could be relatively expensive even if there are no ads that show below it. Or even if you’re the only advertiser. You could even show at the bottom of the search page. This means there’s a minimum buy in or a “reserve price.” What is it? No one knows. You won’t know until you’re doing it. Every threshold is a factor for YOUR ad rank. Everyone’s ad rank is different. Each auction is different. For every search, there’s a different threshold. The penny saver system is done.

Assumption 4: Only Low quality ads have higher thresholds thus requiring higher bids.

This can also be true for high quality ads. Competitiveness of ads. So, if there are two advertisers both will have a similar opportunity to with the auction. As the gap in ad rank between two advertisers grow the higher ranking ad will be likely to win. This is the organic aspect of the threshold. It helps lifts the ads with the best relevance, best quality, and experience . with similar ad rank. Google doesn’t want the big guys to always win. Google wants the best experience for the user. Google is saying these ads are more impactful and more useful.

However, the winner of the ad may also pay a higher cost per click for the benefit of the increase certainty of winning. So, you get to be number one because of better ad ranking and you also have to pay more for the benefit of being number 1. Hmmm…sounds like taxes. The benefit is the bigger companies with a ton of money can’t cheat the system. This certainly levels the playing field. It also forces the need to pay attention to organic aspects of user experience and ads.

Assumption 5: My keywords have high quality scores and my ads are high quality. My ads will always rank high.

Ready for the gut punch? The threshold changes on every single auction based on industry, user signals, devices, topics and nature of the search. These are just a few of the things. The threshold is interpreted by every auction. Meaning, every search the user’s performed. History of what the user has searched comes into play. Google will serve ads based on what users have searched for in the past and serve ads based on their search. Your ad rank will change given these different signals. The context of the person’s search. It’s not the keyword you select only and how you relate to it as the advertiser but based on the individual/person performing the search at that time. With the ad auction, context matters. When calculating ad rank, Google looks at the search terms a person has entered, the person’s location at the time of search, the type of device, the time of the search, and nature of the search terms and other ads and search terms that show up on the page. And Google loves to keep things interesting (keep from laughing)…and other user signals and attributes. What are signals and attributes? We may never know.

Bottom line, if you’re advertising and things are going well and you’re making money, don’t stress out. Keep putting out the quality ads, select the relevant keywords, and keep things simple. Pay attention to your competitors. If you’re my client, rest easy. I’ve got this.