Ask ten agencies what you should spend on Google Ads and you'll get ten confident, different answers. The honest answer is that the right budget comes from your own numbers, not from a benchmark. Here's how to derive it.
Start from the value of a customer
Work backwards: what is a new customer worth to you, and what fraction of enquiries become customers? If an average customer is worth ₹20,000 and you close 1 in 4 enquiries, then an enquiry is worth roughly ₹5,000 to you. That's your ceiling — if a lead from ads costs less than that, the channel makes money.
Estimate your cost per lead
Google's Keyword Planner shows rough cost-per-click ranges for your keywords. In most Indian service niches, CPCs run from ₹15–₹40 for low-competition local terms to ₹200+ for competitive commercial ones. If your landing page converts around 5% of visitors into enquiries — a realistic figure for a decent page — a ₹50 CPC means roughly ₹1,000 per lead.
Budget for learning, not just clicks
Your first month's real product is data. You need enough clicks to learn which keywords, ads, and audiences convert — as a rule of thumb, plan for at least 20–30 conversions in the learning period. If your estimated cost per lead is ₹1,000, a serious test budget is ₹20,000–₹30,000 over the first 4–6 weeks. Spending ₹5,000 'to try it out' usually buys too little data to conclude anything.
The three ways small budgets get wasted
- No conversion tracking — if you can't see which clicks became enquiries, you're optimizing blind. Set up tracking before spending anything.
- Broad match with no negative keywords — your ads show for irrelevant searches and the budget leaks away in silence. Review the search terms report weekly.
- Sending traffic to the homepage — a focused landing page that matches the ad's promise can double conversion rates versus a generic homepage.
When to scale, when to stop
After the learning period, the decision is arithmetic. If leads cost comfortably less than they're worth, scale in steps of 20–30% while watching cost per lead. If leads cost more than they're worth, don't just add budget — fix the weakest link first, which is usually the landing page or keyword targeting, not the bid.
The businesses that succeed with Google Ads aren't the biggest spenders. They're the ones who know their numbers, track everything, and scale only what's proven to work.