How Much Should You Spend on Google Ads? Honest Answers from a UK Google Ads Agency

How much should you spend on Google Ads? A UK Google Ads agency shares the budget formula, a worked example and the spending mistakes to avoid.

There is no single right number. Your Google Ads budget comes from a formula: the leads you want each month, multiplied by what a click costs in your industry, divided by how often your landing page turns a click into an enquiry. Any UK Google Ads agency that quotes you a figure before asking about your business is guessing.

"How much should I spend?" is the first question we get asked about Google Ads, and it deserves better than the usual answer, which is a shrug dressed up as strategy. So here is the formula we actually use, a worked example you can copy, and the two budget mistakes that quietly eat more UK ad money than any algorithm ever has.

How do you work out your Google Ads budget?

The short answer: start from the leads you want, not from a number that feels comfortable. Work backwards from there.

The formula looks like this. Decide how many leads you want each month. Find out roughly what a click costs in your market. Estimate how many visitors your landing page converts into enquiries. Then do the maths.

Say you want 20 leads a month. Clicks in your industry cost about £3.50. Your landing page turns 5 per cent of visitors into enquiries. To get 20 leads at 5 per cent, you need 400 clicks. And 400 clicks at £3.50 is £1,400 a month. That is your starting budget, built from your numbers rather than ours.

We will be honest: we find this little bit of arithmetic properly satisfying. Three numbers in, one defensible budget out. It is the closest marketing gets to a magic trick, except you can check the working.

Two of those numbers are also levers. Improve the landing page from 5 per cent to 8 per cent and the same 20 leads need only 250 clicks, which is £875. That is why we bang on about conversion rate optimisation: it makes every future pound of ad spend cheaper.

What does a click actually cost in the UK?

The short answer: it varies enormously by industry, which is exactly why a one-size budget is nonsense. Competitive markets like legal, finance and home improvements pay far more per click than quieter niches, because more advertisers are bidding in the same auction.

The good news is that cost per click is not fixed. Better ad relevance, tighter match types and smarter scheduling all pull it down. For Northumbria Cars we cut the cost per click by 98 per cent, which meant the same budget suddenly bought dozens of chances to win a customer instead of one. The full story is at our Northumbria Cars case study.

Here is the geeky part we find properly fascinating. Every time someone searches, Google runs a tiny auction in a few milliseconds, and the winner is not simply the highest bidder.

Relevance is scored too, so a well built ad pointing at a genuinely useful page can beat a bigger budget behind a lazy one. It is one of the few corners of business where doing the job properly literally lowers the price.

If you are not sure what clicks cost in your market, ask us and we will look it up properly rather than guessing. Cost per click and its friends are all explained in plain English in our jargon buster too.

Why is a tiny Google Ads budget a false economy?

The short answer: because a budget that is too small never generates enough data to learn from, so it fails slowly and teaches you nothing on the way.

Run the formula backwards on a £5 a day budget. That is £150 a month. At £3.50 a click, you get about 43 clicks.

At a 5 per cent conversion rate, that is roughly two leads. Two. From two leads a month you cannot tell which keyword works, which ad wins, or whether Tuesday beats Thursday. The campaign is not failing because Google Ads does not work. It is failing because it is being starved.

This is the saddest situation in paid advertising: a business that technically ran ads, got nothing useful, and walked away convinced the whole channel is a con. The budget did not buy results. It bought just enough rope for the campaign to trip over.

Can you spend too much on Google Ads?

The short answer: yes, and it usually happens in month one. Spending big before you have data is how budgets vanish with nothing to show for it.

The sensible pattern is to start at the formula number, let the campaign gather real search terms and real conversion data for a few weeks, then scale the parts that are working. Scaling a proven campaign is a joy. Scaling a guess is a bonfire.

A useful rule: increase spend when the data says yes, pause and review when the data says nothing. Seasonality deserves a thought too. If your busy months are predictable, plan the budget to lean into them rather than spreading the same amount thinly across the year like supermarket butter.

If you cannot tell from your current reports whether the data is saying yes or nothing, that is the actual problem, and it is fixable. Our free Ad Spend X-Ray will show you where your money is really going.

How do the three budget mistakes compare?

The short answer: too small starves the data, too big too soon burns the budget, and the formula-based budget is the one that learns. Side by side:

What should a UK Google Ads agency charge you for?

The short answer: management, not mystery. Your ad spend and the agency fee are two separate budgets, and they should never be blurred together.

At MDH, paid ads are run by Jared, who watches client accounts daily and advises on budget using the same formula you have just read. Ad spend is billed separately and paid by you directly to Google, so you always know exactly what went to the platform and what went to the people managing it. Paid ads come as part of the Hero+ subscription, from £2,499 a month alongside SEO, content and design, and the detail of how we run ads is at our Google Ads page.

If you would like a budget recommendation built on your numbers rather than a hunch, start with our free two minute Marketing MOT, or just talk to us. We will show you the working. We always show the working.

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