Short answer: Spend enough on Google Ads to buy a steady flow of conversions at a cost you can afford. Work it out backwards: cost per click divided by conversion rate gives your cost per conversion, times the conversions you need each month. As a rule of thumb, €1,500 to €3,000 a month is a good minimum, with less possible in some markets and much more in competitive ones.
Key takeaways
- Your budget follows from three numbers: cost per click, conversion rate and the cost per conversion you can afford.
- Budget for enough conversions to learn from. In our experience, around 30 a month per campaign is a sensible floor, which for most businesses means €1,500 to €3,000 a month or more.
- Google's daily budget is an average. A campaign can spend up to twice it on one day, but never charges more than 30.4 times it in a month.
- Start focused, raise spend in steps while cost per conversion holds, and cut only after a fair test, not a bad week.
There is no single right number, and anyone who quotes one without asking about your margin is guessing. Turn the question around: how many customers do you want from Google, and what can you pay for each one? The budget follows from the answer.
This post assumes you have already decided Google Ads fit your business. If you are still weighing that, start with our guide on whether Google Ads are worth it.
How do you work out a Google Ads budget?
Work back from what a conversion is worth to you. Divide your expected cost per click by your expected conversion rate to get a likely cost per conversion, compare it with your target cost per acquisition (CPA) or return on ad spend (ROAS), then multiply by the conversions you want each month.
Step 1: set the most you can pay per conversion
For ecommerce, take your average order value and multiply it by your margin after product cost, shipping, payment fees and returns. That is your break-even cost per sale. Your target should sit below it, so the ads make money rather than just covering themselves. If you think in ROAS instead, our guide to what a good ROAS is shows how to turn margin into a ROAS target.
For lead generation, multiply the profit of a closed customer by the share of leads that close. €2,000 of profit and one in ten leads closing makes a lead worth up to €200.
Step 2: estimate cost per click and conversion rate
Google's Keyword Planner gives a range of bids for your keywords. Use the upper half, because the clicks you want most are usually the competitive ones. For conversion rate, use your own site's data and be conservative: a new campaign rarely converts as well as your best traffic.
Step 3: multiply out to a monthly budget
The inputs
Expected cost per click €1.50. Expected conversion rate 3%. Average order €90 with a 50% margin, so break-even is €45 per sale and the target is €35.
Cost per conversion
€1.50 divided by 0.03 gives €50 per sale. That is above the €35 target, so the shop needs a better conversion rate, cheaper keywords or a higher order value before it scales.
Monthly budget
To learn from 30 sales a month at €50, it needs about €1,500 a month, or roughly €49 a day. It might start on its tightest, cheapest keywords to bring cost per sale closer to target.
These numbers are an example, not a benchmark. The maths tells you two things at once: what a useful budget is, and whether the campaign can be profitable at all. If expected cost per conversion is far above what you can pay, spending more will not fix it.
How much budget do you need to get useful data?
Enough to record a steady flow of conversions, not just clicks. In our experience, around 30 conversions a month per campaign is the floor for making confident decisions, and more is better. Below that, a few lucky or unlucky days swing the results and you end up reacting to noise.
Google's own guidance points the same way. When judging Smart Bidding, it suggests looking over at least two full conversion cycles, and over a longer window such as a month, or until you have at least 50 conversions, for a clearer view. It also notes that if you have no conversion history yet, a click-based strategy such as Maximise clicks or Manual CPC can help you build data first.
So a small budget spread thin learns nothing. €1,000 a month across five campaigns gives each too few conversions to judge. The same €1,000 in one focused campaign can tell you within weeks whether Google works for you.
Narrow the scope rather than spreading the budget. Cut to your highest-intent keywords, one product line or one location. If even that is out of reach, track a cheaper step, such as add to cart or a qualified enquiry, while sales data builds up.
How do Google's daily budget and monthly limit work?
In Google Ads you set an average daily budget per campaign. Google treats it as an average across the month, not a hard daily cap. According to Google Ads Help, a campaign can spend up to twice its average daily budget on a given day when traffic allows, but you will not be charged more than 30.4 times the average daily budget in a month, 30.4 being the average number of days in a month.
If served costs go over either limit, Google says you are not charged for the difference. So the number to plan around is the monthly figure: decide what you want to spend in a month, divide by 30.4 and enter that as the daily budget.
| Setting | What it means in practice |
|---|---|
| Average daily budget | What the campaign aims to spend per day across the month. €50 a day means roughly €1,520 a month. |
| Daily spending limit | Up to twice the average daily budget on a busy day, so up to €100 on a €50 budget. |
| Monthly spending limit | No more than 30.4 times the average daily budget. Google covers anything served above that. |
| Mid-month change | Google paces the rest of the month to the new daily budget times the remaining calendar days. |
| Campaign total budget | An alternative for a fixed amount over a set period, such as a sale. It has to be chosen when the campaign is created. |
The common mistake is to cut the budget on a day the campaign spends double. Over the month it evens out, so check spend weekly against your monthly plan.
PPC management services that start from your margin
We work out what a conversion is worth to you, set a budget that buys enough data to learn from, and scale only while cost per conversion holds. If the maths says Google will not pay back yet, we say so before you spend.
See our PPC management servicesWhen should you raise or cut your Google Ads spend?
Raise spend when cost per conversion is comfortably below your target and the campaign is limited by budget. Cut it when cost per conversion stays above what you can afford after a fair test of several weeks with working tracking. Everything in between calls for fixing the campaign, not changing the budget.
Signs it is time to spend more
- Cost per conversion holds below target over at least two conversion cycles, not just a good week.
- The campaign is limited by budget. Google shows this status when your budget stops ads showing for searches you would win.
- Total sales or leads in your shop or CRM rise when spend rises, not only the conversions Google reports.
Raise in steps, such as 20% to 30% at a time, a week or two apart. Google says budget changes take effect immediately and do not put Smart Bidding back into learning, but extra spend buys pricier clicks, so cost per conversion usually creeps up as you scale.
Signs it is time to cut or pause
- Cost per conversion is well above break-even after several weeks with working tracking and a decent landing page.
- Spend rises but total sales do not. The campaign may be buying conversions you would have had anyway, such as brand searches.
Before you cut, check the cause. Rising costs on a campaign that used to work often point to a tracking break or a landing page change. Marketing analytics services can tell you which before you turn off something that was working.
Frequently asked questions
Google does not publish a minimum budget, and its own advice is to start with an amount you are comfortable spending per day. The practical minimum is set by your numbers: enough to buy a steady flow of conversions at your expected cost per conversion. If that means €40 a day, €10 a day will mostly buy uncertainty.
In our experience, €1,500 to €3,000 a month in ad spend is a good minimum for a focused campaign. Some industries, products and services with cheap clicks can work with less, while markets with high CPCs and heavy competition need a lot more. Run the cost per conversion maths above to see where you sit.
Give each campaign enough to reach a useful number of conversions, and fund your highest-intent searches first. A brand campaign usually needs little. If the budget cannot support every campaign properly, run fewer campaigns rather than starving all of them.
No. The budget you set in Google Ads is media spend only, paid to Google. Any agency or freelancer fee comes on top, so include it when you check whether the cost per customer still works. Our guide on how performance marketing agencies charge explains the common fee models.
What to do next
You can set a sensible starting budget in an afternoon with numbers you already have.
- Work out the most you can pay per sale or lead from your order value, margin and close rate.
- Pull cost per click estimates from Keyword Planner, divide by a conservative conversion rate and multiply by 30 conversions to get a first monthly budget.
- If you already run Google Ads and want a second opinion on your budget, ask for a free written Google Ads audit. We send it within 48 hours, and if Google Ads management services or a Google Ads agency would not pay back for you yet, we tell you.