Most businesses approach Google Ads backwards: they pick a comfortable number to spend and hope it produces enough leads. The right approach starts from the other end: how many leads do you need, and what does a lead cost to generate? This guide walks through the logic so you can set a budget you can defend.
Once you have read the framework below, run your own numbers in our free Google Ads budget calculator. To have a strategist check your figures, our Google Ads management team can scope a campaign and give you a realistic cost per lead estimate for your category.
The most useful starting question is not 'how much should I spend?' but 'how many leads do I need this month to hit my revenue goal?' Working backwards from a lead target gives you a budget that is tied to a business outcome rather than a gut feel.
Google's Keyword Planner gives a forecast range for any keyword. For a real estimate, look at the top-of-page bid for the keywords you actually want to win. Competitive categories in professional services can run well above the average, so research before you commit.
Average CPCs across Google Ads are misleading. Look at the specific keywords you intend to bid on in your location, not industry-wide averages.
Purpose-built landing pages that match the ad message typically convert between 2% and 5% for service businesses. Sending traffic to your home page usually produces less than 1%. The assumption you make here drives the budget calculation more than almost anything else, so use your real data if you have it.
| Landing experience | Typical conversion rate |
|---|---|
| Home page or general service page | 0.5 to 1.5% |
| Dedicated landing page matched to the ad | 2 to 5% |
| Highly targeted, well-tested landing page | 5 to 10% |
The spend that goes to Google is only part of the cost. An agency management fee, typically 10 to 15% of spend with a minimum floor, sits on top. Build it into the total so you are comparing like with like when you weigh up the investment.
Google Ads performance shifts with competition, seasonality and your own creative quality. Set a starting budget, measure the real cost per lead after the first 30 days and adjust. A budget set once and left alone will usually drift into poor performance.
Most accounts need around $2,000 per month in media spend to generate enough data for the algorithm to optimise. In low-competition categories, less can work. Below a threshold, the platform cannot gather sufficient conversion signal.
TPR Media operates from Level 34, 1 Eagle Street, Brisbane City QLD 4000, serving clients across Brisbane and Australia-wide.
TPR Media's Google Ads budget guide explains how to work backwards from a lead target using CPC and landing page conversion rate, with a free calculator to run the numbers for any Australian business.