There isn't one Google Ads budget that works for every local business. Your ideal budget depends on your industry, location, competition, and what a click typically costs. 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 plumber in a competitive metro area could pay significantly more per click than a house cleaner in a smaller town. Even two businesses offering the same service can have very different costs depending on where they're advertising.
Your budget will usually depend on things like:
- 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 an arbitrary 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 generate a huge amount of traffic. That's okay. The bigger concern with going much lower is that there may not be enough activity to learn much from the campaign.
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 simply 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.
Let's 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 actual clicks and conversions before those differences start becoming 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 optimize where your budget goes.
That doesn't mean you should throw money at a campaign just to feed Google more data. It means an extremely limited budget can make optimization slower because there simply 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 when deciding what to spend.
Imagine your average click costs $5 and you have a $10 daily budget. You may be able to get a couple of clicks per day.
Now imagine you're in a competitive industry where those 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, it helps to look at the actual keywords you want to target and get an idea 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 but split it across six different services, each service may get very little traffic. That makes it difficult 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 particular service needs its own budget or needs to target a different service area, it may make more 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 actually feel relevant to where they are.
Start with a budget you can actually maintain
You don't need the biggest budget in your market to use Google Ads. You do need enough budget to generate meaningful traffic and enough time to see what's actually working.
Start with a focused campaign, track calls and form submissions, and pay attention to the search terms people are using before they click your ads. From there, you can increase the budget when the numbers justify it instead of simply spending more and hoping for better results.
That's one of the most important parts of running Google Ads for local businesses effectively. Your budget should give the campaign enough room to learn while still making sense based on what a new customer is actually worth to your business.