How Much Should You Spend on Google Ads? A Straight Answer

The short answer

In most populated markets, $1,000/MO in ad spend is a solid starting point for service businesses that work inside the home. Plan on three months of spend before you see profit. Roofing, siding and exterior work typically need three to four times that.

Below is the reasoning, plus the management fees to watch out for, because the budget is only half of what you'll pay.

Why Google Ads matters even when referrals are strong

All of our clients doing seven figures and multiple seven figures in annual revenue are running Google Ads effectively.

They still have strong referrals and real networking partnerships. What they don't do is rely on one source of leads. Referrals and local SEO carry most businesses a long way, but once you're hiring a team and trying to work on the business instead of in it, you need lead flow you can turn up. Google Ads is how you get it.

The two costs you need to understand

When you hire someone to run your Google Ads, you pay two separate things:

1. Your ad spend: the money that goes to Google
2. The management fee: the money that goes to the agency

Most business owners only ask about one. Both matter, and the second is where people get hurt.

Part 1: How much ad spend you actually need

The right number depends on your industry and how saturated your market is. Here's what we see consistently.

Lean budgets can work in the right market. T.J. Tile & Contracting in Tampa has averaged 5+ leads a week for 24 months straight on $500 a month.

Plan on three months before profit

This is the part nobody tells you, and it's why so many business owners try ads once, lose money and never go back.

Save up at least three months of ad spend before you launch, and expect not to profit during that window. A brand new ad account competes against businesses that have spent consistently on Google for years. Google doesn't know yet whether you're a reliable advertiser, so established accounts get priority while you build history.

That's not a flaw in your campaign. It's how the auction works. Spend consistently with a capable team behind you, and your cost per conversion drops over time.

Here's what that looks like month by month on our 6-month Google Ads roadmap.

Part 2: You don't always need to spend more

When ads stop converting, the usual advice is to raise the budget. Set up correctly, you can grow results without increasing spend.

• Quality Score. Google scores how well your ad and landing page match what the searcher wanted, from 1 to 10. Run the same ad and landing page across ten cities and your score drops, and you pay more per click. Unique ad copy and landing pages for every service and location push you toward a 7 to 10, which drops your cost per click.
• Cost per conversion. Update ads every two weeks, work your negative keyword list aggressively, and build custom audiences once Google has 30 to 40 conversions to learn from.

Done right, it adds up. Benson Electric in San Diego generated 500+ leads in 3 months at under $9 each.

Part 3: The three management fee models

Flat management fee. A set amount each month. Predictable.

Percentage of ad spend. The agency takes 15% to 35% of every dollar you spend. It looks cheap at $1,000/MO, but it scales against you. The agency's incentive becomes your budget going up, not your cost per conversion going down.

Flat fee plus a percentage. Walk away. I had a client spending $12,000 a month whose 25% fee meant $3,000 went to the agency. Only $9,000 was actually buying ads. They paid for a $12,000 budget and got the results of a $9,000 one.

Ask every agency directly: is there a percentage of ad spend on top of the management fee?

How we price it

Flat management fee, tiered by ad spend. Never a percentage.

The work scales with spend. At $1,000 a day, someone should be in your account multiple times a day. Every dollar of ad spend goes to Google, in your account, under your name. Our Marketing + Ads Pro plan is $999/MO, combining our $499/MO Marketing Pro plan with ads management for spend up to $5,000/MO. See Google Ads growth.

If $1,000/MO is too much right now

Start with Google Local Service Ads. The lead goes to you alone, not five competitors, and if leads don't come through, you don't pay. LSAs cap out at a few hundred to a few thousand a month depending on your market, which makes them the perfect stepping stone into search ads.

Before you hire anyone to run your ads

• Ask for current reviews. Real, recent reviews from clients running ads with them now.
• Ask for examples in your industry. HVAC and roofing aren't the same problem.
• Confirm whose account it runs in. It should be yours. Always.
• Confirm there's no contract. If they need six months to prove themselves, ask why.

The bottom line

Budget about $1,000/MO to start in most markets, more for roofing, exteriors and legal. Save three months of spend before you launch, and pay a flat fee, never a percentage.

Want to see what happens each month after launch? Check out our 6-month Google Ads roadmap.