Lead Generation
How much should I spend on Google Ads?
Work it backwards from the job, not forwards from a benchmark. The arithmetic below takes about five minutes and tells you whether paid search is worth running for your business at all.
THE SHORT ANSWER
The right Google Ads budget is whatever buys the number of jobs you actually want, worked back from your average job value and your close rate. Decide the most you can pay for a booked job, multiply by the jobs you want per month, and that is the budget. If the resulting number is smaller than the cost of a few clicks in your trade, paid search is not the right first move for you, and no amount of clever campaign work changes that.
Why nobody can quote you a number
Every "average cost per click for plumbers" figure you will find is an average across the whole country, every kind of search, and every level of competition. Your auction is a few square miles wide and contains a handful of competitors. The national average tells you almost nothing about it.
What a click costs you is decided live: who else is bidding for that search in your area, how relevant your ad and landing page are, and what you are willing to pay. Two businesses in the same trade and the same city routinely pay very different amounts for the same search.
So the useful question is not "what do clicks cost". It is "what is a booked job worth to me, and what am I willing to pay for one". That number you can work out yourself, today, without any data you do not already have.
The arithmetic, in four numbers
You need four things, and you already know three of them.
- 1. Your average job value. What a typical job from this kind of customer actually invoices. Use the average, not the best one you ever did.
- 2. Your gross margin on it. What is left after materials and labour. This is the money the advertising is competing for, not the invoice total.
- 3. Your close rate on a lead like this. Of the enquiries that come in cold from a search, what share become paid work. Most owners overestimate this. If you do not know, be pessimistic.
- 4. How many extra jobs a month you want. Not "as many as possible". A real number that your crew can actually deliver without wrecking the work you already have.
Work it back
Take your margin on an average job. Decide what share of that you are willing to hand over to acquire the job: a quarter is comfortable in most trades, a third is aggressive but survivable, half means you are buying revenue rather than profit. That gives you the most you can pay for a booked job.
Now divide by your close rate to get what you can pay per lead. If you close one in four cold enquiries, you can pay a quarter of your booked-job number for each lead that comes in.
Multiply that by the number of extra jobs you want, and you have a monthly budget. Not a guess, and not somebody else's benchmark: a ceiling derived from your own economics, below which the advertising is profitable and above which it is not.
The number that decides whether you can compete at all
Once you have a budget, sanity check it against the size of the auction. Paid search needs enough volume to learn from. A budget that buys a handful of clicks a day cannot be optimized, because there is nothing to optimize on: you will not know for months whether a change helped or the weather did.
This is the honest failure case, and it is common. If your whole monthly budget would buy a few clicks in a competitive trade, paid search is not your first move. You are better served by ranking, by your Google Business Profile, and by answering the phone reliably, all of which produce work without a per-click auction. Come back to ads when the budget can support enough volume to be steered.
We would rather say that on a call than take the money and report on a campaign that never had enough data to improve.
What the budget does not cover
Two costs sit outside the ad budget and both get forgotten.
- Management. Whoever runs the account, whether that is an agency retainer, a percentage of spend, or your own evenings. Ours is a one time setup and 15% of spend, with no retainer on top, and your ad budget never passes through us.
- The page the click lands on. A slow or vague landing page does not only lose the visitor, it raises what you pay for every future click, because relevance and experience feed back into the auction. Paying for traffic to a page that cannot convert it is the most expensive mistake available in paid search.
Start smaller than you think, then hold it steady
Two habits waste more money than any bidding decision.
The first is starting big to "get data faster". You get data faster on the wrong searches, and a month of broad matching without a negative keyword list buys a lot of people looking for jobs, salaries, and instructions on doing it themselves.
The second is switching the budget on and off. Every restart throws away what the account learned and puts you back at the start of the same climb. A smaller number you can sustain for a quarter beats a bigger one you can sustain for three weeks.
Decide the ceiling from the arithmetic above, start below it, and give it long enough to tell you something.
Common questions
What is a reasonable starting budget for Google Ads?
The honest answer is whatever your own arithmetic supports, which is why this page walks through it rather than naming a figure. Work out your margin on an average job, decide what share of it you will pay to win one, divide by your close rate, and multiply by the jobs you want. If that number is too small to buy meaningful click volume in your trade, that is a real answer too: start with ranking instead.
Why will nobody tell me the cost per click for my trade?
Because it is decided in a live auction a few square miles wide, and it depends on who else is bidding, how relevant your ad and landing page are, and what you are prepared to pay. National averages exist but they are averaged across every market and every kind of search, so they do not describe your auction. Anyone quoting you a firm number without looking at your area is guessing.
Is it better to spend on Google Ads or on SEO?
They do different jobs. Ads start producing within days and stop the day you stop paying. Ranking takes months and keeps working between campaigns. If you need work now, ads. If you want the cost per lead to fall over time, ranking. Most businesses that can afford both run the ads while the ranking is built underneath them, because the reviews and profile that ranking work produces also make the paid clicks convert better.
How long before I know if the budget is working?
Long enough to accumulate real conversions, not clicks. The mistake is judging on week one and switching it off, which throws away everything the account learned and guarantees the next attempt starts from zero again. Track booked jobs rather than impressions, and give a steady budget a fair run before changing it.
Should I pause ads when I get busy?
Pausing and restarting is one of the most expensive habits in a paid account, because each restart puts you back at the beginning of the learning curve. If you are genuinely at capacity, lowering the budget is better than switching it off, and raising your prices is usually better than either.
KEEP READING
Want to know what your budget would actually buy?
Tell us your trade, your service area, and roughly what you can put behind it each month. We will come back with what that spend realistically produces, what the creative would look like, and whether ads are even the right first move for you. Sometimes ranking is.