How to work out a Google Ads budget from your own numbers — instead of guessing, or letting an agency guess for you.
Most people approach this backwards. They pick a budget ("let's try two grand a month") and hope. The right way is to work out what a customer is worth to you, and reason backwards.
Example: if a customer is worth $900 in profit and you close one in three enquiries, then three leads earn you $900. If you're happy to spend a third of that acquiring them, you can pay up to about $100 per lead and still be well ahead. That's your ceiling — and now you have a way to judge every campaign, and every agency.
Your budget is simply how many customers you want, multiplied by what you're willing to pay for them. If you want ten new customers a month and can afford $300 in ad spend per customer, that's a $3,000 budget — and anyone who tells you $500 will do it is wasting your money in a different way.
A budget spread thinly across a wide keyword set gets a handful of clicks per term — never enough data to learn anything. The account never optimises, and it looks like Google Ads "doesn't work." It's usually just spread too thin. Better to dominate three high-intent searches than to appear occasionally for thirty.
Clicks in Auckland cost more than clicks in Invercargill, because you're bidding against more and better-funded competitors. The same $2,000 goes much further in a thin market — which is why we'd give a Southland business very different advice from an Auckland one.
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