"What should our Google Ads budget be?" doesn't have a single right answer — but there's a reliably wrong way to arrive at one, and it's more common than it should be.
The wrong way: pick a round number
Plenty of businesses set a monthly ad budget the same way they'd set an office supplies budget — a round number that feels comfortable. That approach ignores the actual cost of acquiring a customer in your specific market and industry.
Start from your numbers, not the market average
Work backward from what you already know: your average deal size, your close rate on inbound leads, and what you can afford to pay for a qualified lead while staying profitable. That calculation gives you a defensible budget — a market-average cost-per-click figure doesn't.
Underfunded campaigns waste money faster than overfunded ones
Google's algorithms need a minimum volume of clicks and conversions to optimize effectively. A budget that's too thin to generate that volume often produces a worse cost-per-acquisition than a slightly larger budget would, because the campaign never exits its learning phase.
Budget for testing, not just for volume
Set aside a portion of spend explicitly for testing new keywords, audiences, and ad creative. Campaigns that spend 100% of budget on "proven" targeting eventually plateau, because nothing new is ever being validated.
The right budget is the one that's sized to your unit economics and large enough to let the algorithm actually learn — not a number picked because it felt safe. We offer a free account audit that can tell you exactly where your current budget stands. Learn more about our Google Ads management.