There’s no single right figure for a Google Ads budget, and anyone who quotes you one before asking about your business is guessing. There is a sensible way to work it out, though. It starts with three of your own numbers: what a customer is worth to you, how often enquiries turn into work, and what clicks cost in your market.
How Google’s daily budget works
Before the maths, it helps to know what the budget setting does, because it catches a lot of people out.
In a standard campaign you set an average daily budget. Google treats it as an average, not a hard daily limit. Because search traffic rises and falls, a campaign can spend up to twice its daily budget on a busy day and less on quieter ones. Across a month, Google won’t charge you more than 30.4 times the daily budget (30.4 being the average number of days in a month). Google sets this out in its page on overdelivery and your average daily budget.
So a campaign set at £20 a day might spend £35 on a Tuesday and £8 on a Sunday, but the most you’ll be charged for that month is £608. If you think in monthly terms, divide your monthly figure by 30.4 to get the daily amount to enter.
A few other things to allow for:
- Surcharges and VAT. Google adds a 2% UK Digital Services Tax fee to invoices for ads served in the UK, with VAT charged on top where it applies (Google’s page on jurisdiction-specific surcharges).
- Short campaigns. If you want to spend a fixed amount over a set period, such as a two-week promotion, Search, Shopping and Performance Max campaigns can now use a campaign total budget instead of a daily one. Google introduced it in January 2026.
- Management fees. If you use an agency, its fee is normally separate from what you pay Google, so check which figure a quote refers to.
Start with what a customer is worth to you
Your budget should follow from how much you can afford to pay to win a customer, not from a round number that feels comfortable or a percentage of turnover. To work that out you need:
- your average job or order value, and roughly how much of it is profit
- roughly what share of enquiries become paying customers
From those two figures you can work out the most you can pay for an enquiry and still come out ahead. If customers tend to come back or refer friends, you may be able to justify paying more for the first job, but be honest with yourself about how often that really happens.
Find out what clicks cost in your market
Cost per click varies hugely between industries, between towns and even between keywords for the same service. Figures you’ve read for another industry, or another country, tell you very little about your own market.
A better guide is Google’s Keyword Planner, which is free inside a Google Ads account once billing details are set up. For each keyword it shows a “top of page bid” low range and high range, based on what advertisers targeting your chosen location have historically paid to appear at the top of the page. Google describes these as roughly the 20th and 80th percentiles (how Keyword Planner’s figures are calculated).
Treat them as a guide, not a quote. What you pay depends on the competition in each auction, the quality of your ads and landing page, and your bid strategy. Once a campaign has been running for a few weeks, your own average cost per click replaces the estimate.
A worked example
Say you run a landscaping business in Cheltenham. These figures are invented purely to show the method, so swap in your own.
- An average job is worth £2,000, of which about £800 is profit after materials and labour.
- You’re prepared to spend up to a quarter of that profit, £200, to win a job.
- You win about 1 in 4 of the jobs you quote for, so you can afford up to £50 per enquiry (£200 ÷ 4).
- You expect about 1 in 20 people who click your ad to get in touch (a 5% conversion rate), so you can afford up to £2.50 per click on average (£50 ÷ 20).
Now compare that with Keyword Planner. If the top of page ranges for your main keywords sit around £1.50 to £3.50, the plan is workable. If they’re £6 to £10, it isn’t, unless you can win more of your quotes, turn more visitors into enquiries, or focus on cheaper, more specific searches.
Then work out the budget. If you want six new jobs a month:
- 6 jobs × 4 = 24 enquiries
- 24 enquiries × 20 = 480 clicks
- 480 clicks × £2.50 = £1,200 a month
- £1,200 ÷ 30.4 = a daily budget of about £39.50
If you’ve never run ads, you won’t know your conversion rate yet. Use a cautious guess, then replace it with real figures once you have a month or two of tracked enquiries. Your website has a big say in that number, which is why we describe it as half of your Google Ads campaign.
What happens when the budget is too tight
A budget that’s too small for the targeting shows up in two ways. The campaign is marked “Limited by budget”, meaning your ads could be showing far more often than the money allows, and automated bidding learns very slowly. Google says a Smart Bidding strategy can take up to around 50 conversions or three conversion cycles to calibrate after a change. A campaign bringing in a handful of enquiries a month takes a long time to get there, and the result often looks like “Google Ads doesn’t work for us” when the real issue was money spread too thinly.
The answer is usually to narrow the campaign rather than stretch it: your most profitable service, your core area, your most commercial keywords. One focused campaign at £30 a day will usually teach you more than five campaigns at £6 a day each. Google’s own tips also suggest that in a campaign limited by budget, slightly lowering bids can sometimes buy more clicks for the same money.
When it’s worth spending more
Increase the budget when your tracked data shows extra spend bringing in enquiries or sales at a cost you’re happy with, not simply more traffic. Google will sometimes recommend a higher budget, but that recommendation is based on the extra clicks and impressions available, not on whether those clicks are profitable for you.
Raise it in steps, give each change a few weeks and check your cost per enquiry holds up. That relies on knowing where enquiries come from, which we cover in how to know which marketing is bringing you enquiries.
Structure matters as much as the number
A well-built account with tight targeting will often get more from the same money than a bigger budget spread across loosely related searches. Before deciding you need to spend more, check the basics: sensible match types, a proper negative keyword list, location settings that match where you work, and landing pages built for the service being advertised.
When we took on an underperforming account for a London home appliances retailer, the work was a rebuild rather than a budget increase: stripping out what wasn’t working, restructuring campaigns and tightening targeting. Twelve months on, the retailer’s online sales had doubled year on year.
Getting the numbers right before you start
If you’re about to launch, our Google Ads setup service starts with a conversation about your business, goals and budget before anything goes live. Or call us on 0330 223 0847 with your numbers and we’ll tell you honestly whether they add up.
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