How much should a small business spend on Google Ads?

For many small businesses, a reasonable starting point is a total monthly Google Ads investment of around $1,200. As a general guide, this might include approximately $500 to $750 per month for professional Google Ads management, with the balance paid directly to Google as advertising spend. These figures are current at the time of writing and will vary depending on your industry, competition, location and campaign complexity.

The right budget differs from business to business, so it is usually best to start with a viable test budget and review results over two to three months before increasing spend. During that period, focus on learning what works, where money is being wasted, and which searches are producing genuine enquiries.

Start with a test budget, not a guess

No single Google Ads budget suits every small business. A Geelong trade business may need a very different budget from a professional service business in Hobart. A better approach is to set a realistic starting budget that generates enough clicks, searches, and enquiries to produce useful data.

Give the campaign around two to three months before making major decisions. That gives you time to identify which keywords, locations and ads are performing well and which are wasting money. Once you have that information, you can increase your spend with much more confidence.

More spend does not always mean better results

If your campaign attracts the wrong people, increasing the budget can simply increase the amount of money you waste. Before spending more, make sure the campaign is generating relevant enquiries from the right locations and for the services you actually want to sell.

For example, a Geelong electrician may want commercial work but find that most enquiries are for small residential jobs. A Hobart consultant may be getting enquiries from outside their service area. Fix those issues before the budget increases.

Reporting matters

For most small business campaigns, monthly reporting is appropriate. Your report should show more than clicks and impressions. It should help you understand how much was spent, what people searched for, which campaigns produced enquiries and what those enquiries cost.

If your reporting is full of numbers but does not help you understand whether the campaign is producing useful business opportunities, it is not doing its job.

Tell your agency when the leads are wrong

Your agency can see the data, but they cannot always know what happens after someone contacts your business. If you start receiving irrelevant calls, enquiries for services you do not offer or leads from the wrong areas, let your agency know straight away.

That feedback helps them adjust keywords, locations, and advertising messages so your budget focuses on higher-quality traffic rather than time-wasters.

Local knowledge matters

Small businesses should also know who is actually managing their campaign. Offshore management can work, but it can also miss important local nuances if the person running the campaign does not understand your market.

For businesses in Geelong, Hobart, Victoria or Tasmania, local knowledge can make a real difference. Someone managing your campaign should understand the areas you service, the types of customers you want and the enquiries that are actually valuable to your business.

So how much should you spend? Are you spending too much on Google Ads?

As a general guide at the time of writing, a small business might allow around $1,200 per month total for Google Ads, split between professional campaign management and the advertising spend paid directly to Google. Around $500 to $750 of that total may go to campaign management, with the balance going toward the actual advertising budget.

The key is not to choose an arbitrary daily budget and go hard from day one. Start with enough budget to gather meaningful data, give the campaign two to three months to settle, then increase your spend based on what is actually producing results.

If you would like GOOP Digital to review your Google Ads campaign, reporting or current spend, contact GOOP Digital.