How Much Should You Spend on Google Ads?

(And Why That’s Not the First Question You Should Be Asking)

This is one of the first things clients ask when they reach out:

“How much should I be spending on Google ads?”

It’s a fair question and here's the honest answer: it depends. But not in a vague, generic answer kind of way. It depends on what you're trying to achieve and whether your strategy is set up to actually get you there.

If you're a business looking for visibility or conversions, your Google Ads budget needs to be tied directly to a clear strategy. Otherwise, the budget is just a number pulled out of the air.

Here's how we approach it at Gearbox.

Get Clear on What you Want

Before we talk numbers, we need to talk goals. Ask yourself:

• Do I want more people visiting my website?

• Do I want to leads, sales, or sign-ups?

• Do I just want my name showing up at the top of the search results?

Your answer determines your which Google Ads bidding strategy makes sense and how much budget you'll need to make it work.

Match Strategy to Objective

If your goal is: Website traffic

Use: Maximize Clicks (automated) or Manual CPC (manual bidding)

These are smart bidding strategies designed to send traffic to your site. They're especially helpful if you're just starting out or want to build an audience that you can retarget later.

This is where I often recommend starting. You get traffic, you gather data, and you start feeding Google's algorithm useful information. Just make sure you’ve got conversion tracking in place.

If your goal is: Conversions (sales, leads, purchases)

Use: Maximize Conversions or Target CPA

If you’ve got some history behind your campaign and are generating at least 30 conversions per month, you can let Google’s machine learning optimize for outcomes, not just clicks.

This is where things start getting more efficient. If you know how much you can afford to spend to get a customer, Target CPA bidding helps keep you profitable.

If your goal is: Visibility

Use: Target Impression Share

Sometimes, you just want to own the top of the search results page. That’s what this strategy is for. It’s about presence, not performance, and it works best when brand awareness is the main goal.

Now Let’s Talk Numbers

Once you know what you’re trying to do, the budget becomes a logical next step.

Step 1: Define Your Target CPA

Start here: how much are you willing to pay to get one conversion – whether that a ticket sold, a lead captured, or a product purchased. Say your average sale is $100 and you're okay spending $25 to get that sale, your target CPA is $25.

At this point most people think, "how much am I willing to spend to get that sale?" To figure it out look at your profit margin, taking into account your Costs of Good Sold, or look back at previous ad campaign results and calculate your ad spend divided by your sales, or start with a benchmark like the Wordstream ad benchmarks for your industry. These benchmarks are broad and not ideal, but they're a starting point, and better than nothing.

Step 2: Multiply by 30 (at least)

Google's Smart bidding strategies, like Maximize Conversions, work best when your campaign has enough conversion data. A good rule of thumb is to aim for at least 30 conversions/month.

Using the example above, if your target CPA is $25: $25 x 30 conversions = $750/month or roughly $25/day — a reasonable baseline to start a realistic Google Ads campaign budget.

Step 3: Be Patient

In the beginning, your actual CPA may be be higher. That’s part of the learning process — Google's algorithm needs data to work with. If you’re just starting out, plan to adjust your Google Ads campaign as you gather more insight. More on this later.

New to Google Ads? Here's How to Start

If you’re setting up your first campaign or just getting serious about Google Ads, here's a what I recommend:

1. Set up conversion tracking properly. This is critical. If you skip getting conversion tracking set up, there’s no way to know what’s working. Without it, you're flying blind.

2. Start with Maximize Clicks. This builds traffic and gives Google's algorithm enough to work with while you gather conversion data.

3. Once you reach 30+ conversions/month, shift to Maximize Conversions or Target CPA. This is where your performance marketing efforts start becoming efficient.

4. Focus on optimizing. As mentioned previously, for the first few weeks your actual CPA will likely be higher than your target. Your focus should be on optimizing your ad by refining your targeting, ad copy, landing pages and keyword bids in order to lower your actual CPA over time. Keep doing this until you reach your target CPA.

5. Scale responsibly. Once you've hit your target CPA, gradually increase you ad budget to gain more conversions. Just do it responsibly, 20%–25% at a time, not all at once.

Watch Out for These Common Pitfalls

• Starting with too little budget. Tiny budgets don’t give Google's algorithm's enough data to work with. You’ll waste time and walk away thinking ads “don’t work.”

• Skipping conversion tracking. This is non-negotiable. Without it, there’s no insight into how your budget translates into outcomes. You can't improve what you can't measure.

• Jumping to advanced strategies too early. Tactics like Target ROAS bidding only work when you’ve got strong historical data and are tracking conversion values accurately.

Wrapping It Up

Your Google Ads budget isn’t arbitrary. It should be calculated based on your business goals, your cost per acquisition, and your campaign’s performance history. This applies whether you're running a campaign for service sales, lead generation, or e-commerce.

At Gearbox, we help small businesses build smart, effective digital strategies that actually deliver — not just ads that burn through cash.

If you’re not sure where to begin or want a second opinion on your current setup, we're here to help.

👉 Schedule an Intro Call Let’s figure out the right Google Ads bidding strategy and budget for your business — and make your spend actually work for you.