In the past, buying visibility meant buying a billboard or a page in the newspaper, a flat fee paid regardless of how many people actually acted on what they saw. Paid search inverted that arrangement entirely: you pay only when someone interested enough to click actually does, which sounds efficient right up until the moment you try to set a first-month budget and realise nobody gave you a number to start from.
Most small businesses either guess, picking a round figure that feels safe, or copy whatever a competitor is rumoured to be spending. Both are the wrong inputs. A realistic Google Ads budget is not a feeling, it is arithmetic built from two things you can actually know: what a click costs in your industry, and what your own site does with the clicks it gets.
What does a click on Google Ads actually cost?
It depends heavily on your industry, and swings wider than most first-time advertisers expect. According to WordStream's Google Ads Benchmarks report, average search cost-per-click across industries typically ranges from roughly $2 to $4, but categories with high-value customers and heavy competition, legal services and certain B2B software segments among them, routinely see costs several times that. There is no industry-agnostic "correct" budget; there is only your industry's real cost per click, multiplied by how many clicks you need.
How do you turn a cost-per-click into an actual monthly budget?
Work backwards from the enquiries you need, not forwards from a number that feels comfortable.
- Start with your target enquiry count: Decide how many qualified enquiries a month would genuinely move your business, not an arbitrary round number.
- Apply a realistic conversion rate: A healthy landing page typically converts somewhere around 3% of visitors into a lead or enquiry; a page that has never been optimised for conversion often does considerably worse.
- Back into the click count you need: Enquiries needed, divided by your conversion rate, gives you the clicks required. Fifteen enquiries at a 3% conversion rate means roughly 500 clicks.
- Multiply by your industry's cost-per-click: 500 clicks at an average $3 CPC is a $1,500 monthly budget, before any adjustment for competition or seasonality.
What happens if the budget from that formula feels too high?
It usually means the fix is not a smaller budget, it is a smaller keyword footprint. Narrowing to the specific, high-intent searches your actual buyers use, and adding negative keywords to filter out the browsers and the bargain-hunters, brings the required click volume, and therefore the budget, down without touching your enquiry target. A campaign spending less by targeting fewer, better-matched searches usually outperforms one spending more on a broad net.
Should the budget stay fixed once you've picked a number?
No. The number above is a starting hypothesis, not a permanent setting. Google itself recommends monitoring performance and reallocating budget toward the keywords and campaigns that actually convert, rather than spreading spend evenly and hoping. A first month is for learning what your real cost-per-lead is; the second and third months are for moving the budget toward what that first month proved works.