If you are thinking about increasing your sales online, Google Ads is a tried and trusted method. However, if it’s your first time it can be hard to set a budget: you don’t want to throw money at ads without a clear plan, but at the same time, you need enough budget to see what’s actually working.
It’s a question we get a lot as a Google Ads Agency: how much should I spend per day/month on my campaign?
The honest answer? There’s no one-size-fits-all figure. But there is a structured way to determine what you should spend, and that’s where this guide comes in.
Start with your Goals, Not your Wallet
Google Ads is a highly adaptable tool, but it relies on three things: the right targeting, good creative, and enough budget to test, learn, and refine.
Before you even look at Google’s interface, take a step back. What are you actually trying to achieve?
- Leads for a service business?
- Direct sales from an e-commerce store?
- Awareness for a new brand or product?
Each goal has a different value, and that directly affects how much it makes sense to spend.
Let’s say you run a B2B consultancy and an average client is worth £3,000. You’d probably be willing to spend £300 to £600 to acquire that lead, assuming a healthy margin.
That’s your cost per acquisition (CPA). And it’s the foundation of any meaningful Google Ads budget.
Google’s own guidance on setting campaign goals offers a useful breakdown here.
Our Simple Formula to Estimate Your Google Ads Budget
You can estimate your monthly Google Ads budget in three simple steps:
Step 1: Work out how many leads you want per month
Step 2: Estimate your website’s conversion rate
Step 3: Estimate your average cost per click (CPC)
If you’re not sure about your site’s conversion rate yet, you can use tools like Google Analytics or apply industry benchmarks. A recent study found that the average conversion rate across all industries on Google Ads is around 4.6%.
Your estimated average cost-per-click is the other important metric here, as it can vary hugely depending on the target industry, campaign type and target locale (we’ve seen everything from CPCs of £0.20 to £30 depending on the industry!). Google’s Keyword Planner tool is a good place to check estimated CPCs for your target keywords, although you will need an active ads account to use this.
Once you have these figures, use this formula:
Ads Budget Formula (v1.)
First work out how many clicks you need:
Clicks Needed = Leads ÷ Conversion Rate
Then you can use this to work out your estimated monthly budget:
Monthly Budget = Clicks Needed × CPC
Example:
- You want 20 leads per month
- Your website converts at 5% (0.05)
Then:
Clicks Needed = 20 ÷ 0.05 = 400 clicks
We can then combine this with your estimated average CPC to work out the overall budget:
- Your average CPC is £2
Monthly Budget = 400 × £2 = £800
Daily Budget = £800 ÷ 30 (or no. of days in the month) = £26.66
That gives you a realistic starting point based on your goals and data.
Quick tip:
You can also work backwards using this simpler method if you know your target CPA (perhaps from running a previous ad campaign):
Ads Budget Formula (v2.)
Budget = Target CPA × Number of Leads
So if you’re aiming for 20 leads with a CPA of £50:
£50 × 20 = £1,000 monthly budget or £33.33 daily budget
Either method gives you a clearer, data-backed baseline than simply guessing. Use it as a foundation, then adjust based on what the numbers tell you once your campaigns are live.
So, what’s the minimum realistic spend for Google Ads?
We’ve worked with businesses spending anywhere from £200 to £10,000+ per month, depending on their size, sector, and goals.
But here’s a hard truth: trying to run Google Ads on £50 to £100 per month rarely gives you enough data to make informed decisions (especially if you want to utilise some of Google’s smart AI-powered campaign features such as P.Max). You’ll likely get a handful of clicks and little else. That’s not enough for Google’s algorithms to optimise or for you to see clear trends.
If you’re a UK service business targeting a local business area, £200 to £600 per month is usually a reasonable starting point.
For national campaigns or e-commerce, you’ll likely need more (£500+), especially in competitive sectors like legal, finance, or health, where CPCs can exceed £5 to £10.
It’s best to start with your minimum budget to test the waters – then, if successful, you can scale up knowing it will be profitable. Google’s Performance Planner is a useful tool for creating sales forecasts to assess how changing your ad spend might affect key metrics such as conversions.
Other variables that impact budget:
- Target location (local, national, or international)
- Keyword competitiveness
- Google Ads Management Fee – if you are not managing the ads yourself, you will also need to consider this cost (we charge £250+15% of ad spend for search ads & £350+15% of ad spend for ecommerce ads).
- Campaign type: Search, Display, Shopping, Performance Max all have different costs, more on this below…
Comparing Google Ads Campaign Types by Cost
Not all Google Ads campaigns are created equal. Each format has its own costs, strengths, and best use cases. Here’s how the main campaign types compare:
Search Ads
- What it is: Text-based ads that appear when someone searches for your product or service on Google.
- Typical CPC: £1 to £5 in most sectors, but legal, finance, and health can exceed £10.
- Use case: Best for capturing high-intent leads. Ideal for local services, B2B, or any business where timing matters.
Display Ads
- What it is: Visual ads (banners or images) that appear across Google’s Display Network on third-party websites.
- Typical CPC: £0.20 to £0.80
- Use case: Best for brand awareness, remarketing, or keeping your brand visible to previous site visitors.
Shopping Ads
- What it is: Product-based ads showing an image, title, price, and link, typically displayed at the top of Google Shopping results.
- Typical CPC: £0.30 to £1.50
- Use case: Designed for e-commerce businesses with multiple products. Performs best with a clean, well-optimised product feed.
Performance Max (P. Max)
- What it is: An all-in-one automated campaign type that uses machine learning to run ads across Search, Display, YouTube, Gmail, and more.
- Typical CPC: Varies, as bidding is goal-driven (e.g. conversions), not focused purely on click cost. This campaign type does require more data to work correctly, so we recommend an average daily spend of over £30 for this to work successfully.
- Use case: Works well for businesses that want full coverage across Google’s platforms, especially those with strong creative assets and accurate conversion tracking.
Not sure where to begin? We Can Help!
The real question isn’t “How much should I spend?”, it’s “How much can I afford to spend to grow, whilst staying profitable?”
Google Ads, when managed correctly, gives you near-instant data on what’s working. But to get to that point, you need to approach budget as a business decision, not a marketing guess.
If you’re unsure what kind of Google Ads budget would work for your business, Search Hog can help. We’re an experienced Google Ads agency with highly competitive PPC Management Packages that can help you make the most of your overall budget.
Get in touch for a free ad audit or budget recommendation.
