The Quick Answer
Most local businesses should start with $1,500 to $3,000 per month in ad spend, plus management fees. This gets you 100 to 300 clicks per month depending on your industry. Below $1,000/month, you typically will not collect enough data for Google to optimize effectively.
That is the general range. But the right budget for your business depends on your industry, location, and what a customer is worth to you. Here is the data to figure out your number.
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Estimates based on typical industry CPCs. Actual results vary by market and campaign quality.
Average Google Ads Cost by Industry (Our Data)
This table comes from the 100+ accounts we manage across the Pacific Northwest. These are real numbers, not national averages from a database.
| Industry | Avg CPC | Min Monthly Budget | Recommended Budget | Expected Clicks | Expected Leads | Cost Per Lead |
|---|---|---|---|---|---|---|
| Contractors (General) | $10-$25 | $1,500 | $2,500 | 100-250 | 8-20 | $75-$185 |
| Roofers | $15-$45 | $2,000 | $3,500 | 78-233 | 6-18 | $110-$335 |
| HVAC | $15-$35 | $2,000 | $3,000 | 86-200 | 7-16 | $125-$285 |
| Plumbers | $12-$25 | $1,500 | $2,500 | 100-208 | 8-17 | $90-$190 |
| Painters | $8-$18 | $1,000 | $2,000 | 111-250 | 9-20 | $50-$110 |
| Medical Practices | $8-$18 | $1,500 | $2,500 | 139-313 | 11-25 | $60-$140 |
| Therapists | $5-$12 | $800 | $1,500 | 125-300 | 10-24 | $33-$80 |
| Landscapers | $5-$15 | $1,000 | $1,500 | 100-300 | 8-24 | $42-$125 |
| Electricians | $10-$20 | $1,500 | $2,500 | 125-250 | 10-20 | $75-$150 |
| Remodelers | $12-$30 | $2,000 | $3,000 | 100-250 | 8-20 | $100-$250 |
"These numbers come directly from our managed accounts in the PNW. A plumber in Boise is going to pay less per click than a plumber in Seattle. But the minimum viable budget stays the same, around $1,500/month. Below that, you just do not get enough clicks for Google to learn which searches convert." - Brock Olsen, Paid Media Strategist
How to Calculate Your Google Ads Budget
Instead of guessing, use this framework to calculate a budget based on your business goals.
- What is a customer worth? Calculate the average revenue per customer (including repeat business). A roofer might average $8,000 per job. A therapist might see a client for 10 sessions at $150 each ($1,500 total).
- What is your close rate? Of the leads that come in, what percentage become paying customers? Most service businesses close 20-40% of qualified leads.
- What is your target cost per lead? Divide customer value by close rate, then decide what percentage you are willing to spend on acquisition. Example: $8,000 job x 30% close rate = you need about 3.3 leads per customer. If you are willing to spend 10% of revenue on acquisition, that is $800 per customer or about $240 per lead.
- How many leads do you need per month? Based on revenue goals and average job size.
- Multiply target leads by cost per lead. That is your monthly ad budget. Add management fees (typically $500-$1,500/month or 15-20% of spend).
Worked example for a roofer: Goal: 5 new jobs/month at $8,000 average. Close rate: 30%. Leads needed: 17/month. Target CPL: $150. Ad budget: $2,550/month. Plus management: $3,050-$3,550/month total investment.
Worked example for a therapist: Goal: 5 new clients/month at $1,500 LTV. Close rate: 50%. Leads needed: 10/month. Target CPL: $75. Ad budget: $750/month. Plus management: $1,250-$1,500/month total investment.
Seattle vs Boise: How Location Affects Your Budget
We manage accounts in both markets, so we can show exactly how location affects costs.
| Industry | Seattle CPC | Boise CPC | Difference | Budget Impact (monthly) |
|---|---|---|---|---|
| Plumber | $18-$30 | $8-$15 | 50-55% lower | Save $500-$1,200 |
| HVAC | $20-$40 | $10-$20 | 50% lower | Save $600-$1,500 |
| Roofer | $20-$45 | $10-$22 | 50-55% lower | Save $700-$1,800 |
| Medical | $10-$22 | $5-$12 | 45-50% lower | Save $300-$800 |
| Therapist | $7-$15 | $3-$8 | 45-50% lower | Save $200-$500 |
| Remodeler | $15-$35 | $8-$18 | 48-52% lower | Save $500-$1,200 |
Seattle CPCs run 40-60% higher than Boise for most industries. This does not mean Seattle is a bad market for Google Ads. Customer values are also higher in Seattle. But the same budget goes further in Boise.
Budgets by Business Stage
Your budget should scale with your business. Here is the framework we use with clients.
| Monthly Ad Spend | Avg Clicks | Avg Leads (5% CVR) | Avg Customers (30% close) | Revenue Per Customer | Monthly Revenue | ROAS |
|---|---|---|---|---|---|---|
| $1,000 | 67-100 | 3-5 | 1-2 | $3,000 | $3,000-$6,000 | 3-6x |
| $1,500 | 100-150 | 5-8 | 2-3 | $3,000 | $6,000-$9,000 | 4-6x |
| $2,500 | 167-250 | 8-13 | 3-4 | $3,000 | $9,000-$12,000 | 3.6-4.8x |
| $5,000 | 333-500 | 17-25 | 5-8 | $3,000 | $15,000-$24,000 | 3-4.8x |
| $10,000 | 667-1,000 | 33-50 | 10-15 | $3,000 | $30,000-$45,000 | 3-4.5x |
Assumptions: $10-$15 avg CPC, 5% landing page conversion rate, 30% lead-to-customer close rate, $3,000 avg revenue per customer. Your numbers will vary.
"I advise clients to allocate 7-10% of gross revenue to total marketing spend. The percentage that should go to Google Ads depends on business stage. New businesses: 50-60% of marketing budget to Ads for immediate leads. Established businesses with strong SEO: 30-40% to Ads. The balance shifts as organic traffic grows." - Matt Russell, Co-Founder & Creative Director
What Management Fees Should Cost
Management fees come in two models: flat fee or percentage of spend.
- Flat fee: $500-$2,000/month. Predictable. Does not increase as you scale.
- Percentage of spend: 15-20% of ad spend. Scales with budget. Can get expensive at higher spend levels.
Red flags in pricing: fees under $300/month (not enough time for proper management), fees above 25% of spend (excessive), and "free management" bundled with required ad spend minimums (hidden costs).
Our pricing model uses flat fees so clients know exactly what they are paying.
How to Know If Your Budget Is Working
Track these metrics monthly:
- Cost per lead: Total spend divided by total leads. Compare to industry benchmarks above.
- Cost per acquisition: Total spend divided by new customers. This is the number that matters most.
- ROAS (Return on Ad Spend): Revenue from Ads customers divided by total Ads investment. Target 3x or higher for most service businesses.
- Conversion rate: Leads divided by clicks. If below 3%, your landing pages need work.
Give your campaigns 90 days before making a budget decision. Month one is learning. Month two shows improvement. Month three gives you enough data to evaluate.
Frequently Asked Questions
What is the minimum Google Ads budget for a local business?
$1,000/month is the minimum for most industries. Below that, you do not collect enough click and conversion data for Google to optimize. We recommend $1,500/month as a starting point for most local businesses.
How much does a Google Ads click cost?
Average cost per click varies by industry, from $5 for a landscaper to $45 for a roofer in competitive markets. Location matters significantly. Boise CPCs are 40-60% lower than Seattle.
Should I increase my budget or optimize my current campaigns?
Optimize first. If your conversion rate is below 5% or your Quality Scores are below 6, increasing budget just increases waste. Once your account is performing well, scaling budget is the right move.
Is $500 a month enough for Google Ads?
In most industries, no. $500/month gets you 25-50 clicks, which is not enough data for meaningful optimization. The exception might be low-CPC industries like therapy in smaller markets, where $500 can generate enough clicks to learn.
How long before Google Ads becomes profitable?
Most businesses see positive ROAS within 60-90 days when campaigns are managed properly. Month one is the learning phase. By month three, you should have clear data on whether the investment is working.
What percentage of revenue should go to Google Ads?
Total marketing budget should be 7-10% of gross revenue. The share allocated to Google Ads depends on your mix. For businesses without established SEO, 50-60% of marketing budget to Ads is common. As organic traffic grows, that share typically drops to 30-40%.
