One of the best things about Google Ads is that you're in control of what you spend. One of the most confusing things is working out how much that should be. Spend too little and you won't get enough data or enquiries to judge it. Spend too much too soon and you can waste money before the campaign is set up properly. Here's how Google Ads pricing works and a simple way to work out a sensible starting budget.
How you're charged
- You pay per click. In most search campaigns you're only charged when someone clicks your ad, not when it's shown.
- You set a daily budget. Google spreads your spending across the month, so you won't be surprised by a huge bill.
- Prices are set by an auction. The cost of a click depends on how many other businesses want to appear for the same search, and on how relevant and useful Google thinks your ad and website are.
- Ad spend and management are separate. Your ad spend goes directly to Google. If you use an agency, its management fee is a separate cost, so make sure any quote shows both clearly.
What affects the cost of a click
- Your industry: services where one customer is worth a lot, like legal or financial services, usually have more expensive clicks.
- Your area: competition varies between cities and suburbs.
- Your keywords: specific searches like "emergency plumber Pinetown" often cost less and convert better than broad ones like "plumber".
- Your ad and landing page: Google rewards relevant ads and pages that give people what they searched for, which can lower what you pay.
Work out your budget backwards
Instead of picking a number out of the air, start with the result you want and work backwards. You need three figures:
- How many enquiries you want each month.
- Roughly how many visitors turn into an enquiry on your website. If you don't know yet, your first month of ads will tell you.
- The estimated cost per click for your keywords. Google's free Keyword Planner tool shows estimates for your area.
A simple example (made-up numbers, just to show the method): say clicks for your service are estimated at R20 each and about 1 in 10 visitors sends an enquiry. Each enquiry would then cost around R200. If you want 15 enquiries a month, you'd need a budget of about R3 000. Your real numbers will be different, but the method stays the same.
Then ask the most important question: what is a new customer worth to you? If one job is worth far more than the cost of the enquiries it takes to win it, Google Ads can be very profitable.
Start small and focused
- Start with one main service and one area rather than everything at once.
- Use specific keywords that show someone is ready to buy.
- Add negative keywords like "jobs", "free", "course" and "DIY" so you don't pay for the wrong clicks.
- Show ads during the hours you can actually answer the phone.
- Send people to a page about that exact service, not just your home page.
Track every enquiry
Set up conversion tracking for calls, WhatsApp messages and form submissions before you spend seriously. Without it, you're guessing. With it, you can see exactly which keywords bring in customers, cut the ones that don't, and confidently put more money into the ones that do.
When to increase your budget
Once you know what an enquiry costs and that the enquiries are turning into paying customers, increasing your budget becomes a simple business decision. Scale up gradually and keep an eye on whether the cost per enquiry stays sensible.
Need help?
We set up and manage Google Ads for local businesses, with tracking built in from day one so you know what every rand is doing. If you're still deciding between ads and SEO, read SEO vs Google Ads: which should you start with?, or request a free growth audit and we'll recommend a starting budget for your business.