Your Google Ads Budget Should Start With Your Business Numbers
There is no universal "correct" Google Ads budget. A £1,000 monthly budget could be highly effective for one business and completely unsuitable for another.
An appropriate budget depends on factors including:
- •Average order value
- •Profit margins
- •Customer value
- •Conversion rate
- •Cost per acquisition
- •Target ROAS
- •Competition
- •Geographic targeting
- •Sales targets
- •Lead targets
- •Available search demand
The Merchant Growth Google Ads Budget Planner uses the information you provide to create indicative advertising scenarios based on your commercial objectives.
What Type of Business Are You?
Select the option that best describes your business to begin.
Budget Planning Explained
How Much Should I Spend on Google Ads?
There is no universal budget. A £1,000 monthly budget could be highly effective for one business and completely unsuitable for another. An appropriate budget depends on your average order value, profit margins, target CPA, growth objectives, competition and available search demand. The right budget is one that aligns with your commercial targets and remains profitable after advertising.
What Is a Good Starting Google Ads Budget?
A good starting budget depends on your objectives and economics, not a fixed figure. Businesses with higher average order values and margins can justify higher budgets because each conversion generates more profit. Businesses with lower margins need to be more cautious. Start with a budget that allows you to gather meaningful data, test campaigns and validate your assumptions before scaling.
Should My Google Ads Budget Be Based on Revenue?
Revenue is a useful starting point, but profit is what matters. A budget based on revenue alone can mask thin margins or high variable costs. A better approach is to base your budget on your commercial objectives — target revenue, target ROAS, and the contribution your advertising needs to generate after ad spend. The budget planner helps you work backwards from these targets.
What Happens If I Increase My Google Ads Budget?
Increasing budget does not automatically produce proportional growth. As spend increases, you may face higher CPCs, increased competition, constrained search demand and lower marginal ROAS. A campaign that performs well at £2,000/month may perform differently at £10,000/month. Scale gradually, monitor performance at each stage, and ensure conversion tracking is reliable before committing significant additional budget.
Google Ads Budget vs ROAS
Your budget and target ROAS are connected. At a given target ROAS, your budget determines your target revenue (budget × ROAS). At a given target revenue, your required ROAS determines your budget (revenue ÷ ROAS). The budget planner calculates this relationship automatically, showing you how different budgets and ROAS targets affect revenue, orders and profit.
Google Ads Budget vs CPA
Your budget and CPA are linked through your conversion volume. At a given budget and number of orders, your CPA is budget ÷ orders. Your maximum affordable CPA is determined by your average order value and gross margin. The budget planner shows whether your target CPA is below your break-even CPA, helping you understand whether your plan is commercially viable.
Google Ads Budget FAQs
Important Information
The Merchant Growth Google Ads Budget Planner provides indicative mathematical scenarios based entirely on information entered by the user. The results are planning estimates and do not predict or guarantee Google Ads traffic, clicks, leads, sales, revenue, ROAS or profitability. Actual advertising performance depends on numerous factors including competition, search demand, CPCs, conversion rates, website performance, product pricing, market conditions and campaign management. The calculator does not constitute financial or accounting advice.