Google Ads
how much should a UK small business spend on Google Ads?
There is no universal number, but there is a reliable method. Start from what a customer is worth to you, work out what you can afford to pay to win one, and set a test budget big enough to buy meaningful data over two to three months. The goal of early spend is decisions, not just clicks.
start with customer value
Work out roughly what a new customer is worth to you over a year, then what you would happily pay to win one. That ceiling, not a competitor's spend or an agency's standard package, is the anchor for your budget. If you don't know those numbers yet, finding them is the first job, because they decide everything downstream.
size the test to buy learning
A first budget has one job: enough data to make decisions. Too small and you finish three months knowing nothing, which is the most expensive outcome of all. The right size depends on your market's click prices, which vary enormously. A competitive legal search and a niche product search live in different worlds, so honest budgets are sized from your actual click costs, not from a standard figure.
scale when the machine pays for it
Increase spend when you know a pound in brings back more than a pound out, and not before. Until then, hold the budget steady and improve the machine instead: search terms, ads, landing pages. Spending more on an account that doesn't convert just buys the same lesson at a higher price.
the honest catch
Some businesses shouldn't be on Google Ads yet. If your website doesn't convert the visitors you already get, fix that first, because ads multiply what the site does, good or bad. And if very few people search for what you sell, your money belongs in other channels for now. Google Ads is exceptional at harvesting demand that exists; it doesn't create demand from nothing.
Common questions
Is there a minimum sensible budget?
- There's a minimum for your market: enough to buy a meaningful number of clicks on your real keywords over a couple of months. Below that you're paying for traffic but not for learning.
Should I spend what my competitors spend?
- No. Their customer value, margins and website are different from yours. Copying their budget imports their economics without their context.
Should I set the budget as a percentage of revenue?
- Only as a rough planning check. Working from customer value and click costs gives you a budget with a reason behind it.
Tom Claydon
Co-founder of Nudge
Ask Tom anything about search, he answers on WhatsApp.