There isn’t one Google Ads budget that works for every local business. Your ideal budget depends on your industry, location, competition, and the cost per click (CPC) in your market. As a general starting point, we usually don’t recommend going below $300 per month for a small campaign with one or two ad groups.
Why there isn’t a perfect Google Ads budget
It’s tempting to look for a number like $500 or $1,000 per month and assume that’s what every local business should spend. Google Ads doesn’t really work that way.
A business in a competitive metro area could pay far more per click than a similar business in a smaller town. Even two businesses offering the same service can see very different costs depending on where they advertise.
Your budget will usually depend on:
- Your industry
- Your location
- How competitive your keywords are
- How many services you’re advertising
- How large your service area is
- How much a new customer is worth to you
That’s why it makes more sense to build the budget around the campaign instead of picking a number first.
Is $300 per month enough for Google Ads?
For a smaller campaign with one or two ad groups, we generally recommend starting at no less than $300 per month. That works out to roughly $10 per day.
Depending on your industry, $300 may not bring in a lot of traffic. That’s okay. The bigger concern with going much lower is that there may not be enough activity to learn anything.
If you’re only getting a handful of clicks each week, it takes much longer to figure out which keywords, searches, and ads are actually producing leads.
So $300 isn’t a magic number where Google Ads suddenly starts working. It’s a reasonable floor for a small campaign in many markets.
More budget gives Google more data to work with
One advantage of a larger budget is that the campaign can gather data faster.
Say you’re targeting several keywords. Some may produce good leads, while others attract people who aren’t really looking for your service. You need real clicks and conversions before those differences become clear.
With more data, you can start answering questions like:
- Which search terms are producing leads?
- Which ones are wasting money?
- Which ads are working?
- Which services are getting the strongest response?
Google’s automated bidding can also use conversion data to decide where your budget goes.
That doesn’t mean you should throw money at a campaign to feed Google more data. It means a very small budget makes improvement slower, because there isn’t much information to work with.
Your budget needs to match the cost of your clicks
The price of a click matters a lot.
Imagine your average click costs $5 and you have a $10 daily budget. You may get a couple of clicks per day. Now imagine you’re in a competitive field where the same clicks cost $20. A $10 daily budget isn’t going to go very far.
This is why the same monthly budget can be perfectly reasonable for one local business and far too small for another. Before setting a budget, look at the keywords you want to target and get a sense of what clicks cost in your market.
Don’t spread a small budget across too many services
Another common problem is trying to advertise everything at once.
If you have a $600 monthly budget split across six services, each one may get very little traffic. That makes it hard to gather useful data or give any one service a real chance to perform.
It’s usually better to start focused. Services can be separated into their own ad groups so the keywords, ads, and landing pages stay closely related. If a service needs its own budget or a different service area, it may make sense to give it a separate campaign.
We also prefer keeping each campaign focused on one service area. Someone searching locally should see an ad and landing page that feel relevant to where they are.