Laptop displaying charts and graphs with tablet calendar for data analysis and planning.

15 October 2026

Setting a Google Ads budget that makes sense

What should we be spending on Google Ads? Most owners ask it as if there’s a correct figure tucked away in a drawer somewhere. There isn’t. A sensible budget comes out of your own numbers first, what a customer’s worth to you and how much work you can take on, and only then gets checked against what clicks cost in your market. Do it that way round and the figure stops being a guess.

In brief

Work out what you can afford to pay for an enquiry before you look at click prices.
Your daily budget is an average. Google might spend up to twice it on a busy day but won’t go past 30.4 times it over a month.
‘Limited by budget’ isn’t always a reason to spend more.
Give any change at least a conversion cycle before judging it, because enquiries don’t always arrive on the day of the click.

Start with what a customer is worth

Plenty of accounts start with a number that just feels affordable. £500 a month, say, because a friend spends that. The trouble is that figure has no link to anything that happens after the click.

Start at the other end. Take a physiotherapy clinic. A new patient who books a course of treatment might be worth a few hundred pounds to the practice, and the owner decides they’d happily pay £60 in advertising to win one. Not every enquiry turns into a patient, though. If roughly one in four does, each enquiry is worth paying up to £15 for.

Those are made-up numbers to show the sums. Yours will be different, and they’re the bit only you know. A kitchen fitter’s average job might run into thousands, so one enquiry can justify far more. An online shop selling £20 candles has very little room at all, which is why shops often work from the value of each order instead of a flat cost per lead.

From cost per enquiry to cost per click

Next you need a rough conversion rate. Google defines it as the average number of conversions per ad interaction, shown as a percentage, and its own worked example is 50 conversions from 1,000 interactions, which comes out at 5%. On a Search campaign the interaction is usually a click.

Stick with the clinic. If an enquiry’s worth £15 at most and about 5 in every 100 clicks turn into one, the clinic can afford to pay around 75p a click on average. Pay more than that and each new patient costs more than the £60 you set aside to win one.

That 75p is a ceiling worked out from the business. It isn’t a market price. And it moves with your website. A page that turns 10 clicks in 100 into enquiries can afford to pay twice as much per click as one that manages 5. That’s why sending paid traffic to landing pages built for each campaign does so much for the maths. The same thinking sits behind service pages that turn visitors into enquiries, and it’s worth checking your enquiry form actually reaches your inbox before you pay for a single click.

Turning it into a daily budget

By default, Google Ads runs on an average daily budget for each campaign. Decide how many enquiries a month you want and can actually cope with. Multiply that by what you’re prepared to pay for each one, then divide by 30.4.

So if the clinic wants 20 enquiries a month at up to £15 each, that’s £300 a month, or just under £10 a day.

Don’t panic when one day’s spend comes in well over that. Google’s budget help explains that a campaign might spend up to twice its average daily budget on a given day to catch busier traffic. Across the month, assuming the budget stays the same, you won’t spend more than 30.4 times the daily figure. Set it at £10 a day and the ceiling is £304.

Capacity counts as much as cash. A plumber who’s booked solid for three weeks doesn’t need more leads this month. A training provider with a September intake probably wants every one it can get in August.

Checking the sums against Keyword Planner

Keyword Planner sits inside Google Ads and gives forecasts for a list of keywords, including estimated daily clicks, daily cost and the average you might pay per click. Those forecasts take your bid, budget and seasonality into account.

Treat them as a rough guide. Google points out that brand-new accounts get forecasts based on historical averages for all advertisers, and that results will be less accurate if you’re targeting a small area. For a local firm covering a few postcodes that’s worth remembering.

If the forecast cost per click sits comfortably under your ceiling, good. If it’s well above, a bigger budget won’t fix it. Narrow the campaign to fewer, more specific searches. Get the page converting better. Or accept that paid search might not pay for that particular service, at least for now. Understanding how match types decide which searches you pay for helps a lot with the first of those.

When a campaign keeps running out of money

Sooner or later you’ll see ‘Limited by budget’ next to a campaign. Google shows it when a campaign is held back by its budget, and it’ll usually suggest a higher daily figure alongside.

Sometimes taking that suggestion is right. If the campaign brings in enquiries at a cost you’re happy with, giving it more room makes sense. Often it isn’t. A small budget spread over every service, a whole county and loose keywords can easily run dry before lunch. Putting most of it behind your best-earning service, and clearing out junk searches with negative keywords and regular checks of the search terms report, frequently does more than topping it up.

There’s also a budget pacing view on the account-level Insights page. It shows how each campaign has spent this month and how it’s projected to spend, with statuses such as ‘On track’ and ‘Budget remaining’.

How your bid strategy spends the money

Your bid strategy changes how that money goes out. Maximise conversions tries to use your full average daily budget. Spending well under budget now? Switching to it could push spend up sharply, and Google says as much. So only set a budget you’d be happy to see used up every day.

Target CPA comes at it from the other side. You tell Google the average you’d like to pay per conversion and it tries to hold that, with some costing more and some less. The £15 from earlier is exactly the kind of figure it wants. Once there’s conversion history, Google will suggest a target based on your average cost per conversion over the last 30 days, adjusted for conversions that arrive late. Start from that real figure. Set it too tight and you may get fewer enquiries.

Both lean entirely on conversion tracking counting real enquiries. If it’s counting page views, your budget gets spent chasing page views. Our guide to how Google Ads works for a business goes into tracking and UK cookie consent in more depth.

Fixed budgets for seasonal pushes

Not every campaign needs to run all year. Think of a garden centre’s Christmas range, a language school’s summer courses or a removals firm before the school holidays. For short bursts like these Google offers campaign total budgets. You set one amount for the whole run, between 3 and 90 days on a Search campaign, and Google paces the spending across that period. Its help page says you’ll never be charged more than the total.

Two catches. Total budgets are only available on new campaigns, and you can’t change the budget type once a campaign’s been created. Decide before you build it.

Give it long enough to tell you something

A month on a small budget won’t tell you much. Twenty clicks isn’t a trend. Google’s own Smart Bidding guidance suggests letting at least one conversion cycle pass before judging performance, and a cycle or two after changing a target. For a solicitor whose clients take weeks to decide, that’s a long wait. For a takeaway it might be a matter of hours.

Change one thing at a time as well. Raise the budget and rewrite the ads in the same week and you’ll never know which one made the difference.

Want a second pair of eyes on the numbers?

Working this out takes an afternoon with a spreadsheet and last year’s figures. If you’d rather someone else did the sums, and kept an eye on spend week to week, that’s part of our Google Ads management. We’ll start with what a customer’s worth to you before anyone touches a keyword. Talk to us about your account and we’ll tell you plainly whether your budget can do the job you want from it.

Keep reading

Sources

Scott Woodfield

Founder of TWA, Scott harbours over 10 years of digital marketing agency experience. Everything from removing a background of an image to full blown ecommerce solutions from the ground up, Scott's your go to guy for anything marketing & web.

Let’s have a chat