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Best Google Ads Budget For SME’s

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Eric Vardon
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Google Ads is complicated. From optimizing the copy to targeting and everything in between, it can be a real headache. You want your marketing budget to be well spent and do something, right?

50% of users who click ads buy something, as well. The customers are waiting for you to grab them. That means they have to click your ads in the first place, though.

Want to learn how to set a Google Ads budget and maximize its ROI? Keep reading.

What the data says about Google Ads

The reality is determining a “best” budget for Google Ads is tough. There’s CPM, CPC, keyword selection, industry, a huge laundry list of things that affect cost.

However, according to a study performed by Hochman Consultants, these are some benchmarks:

  1. CPC: $2.14
  2. CTR: 1.16%
  3. Conversion rate: 6.5%
  4. Cost per conversion: $33
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Let’s presume you had $1,000 per month to dedicate towards Google Ads. Based on the above data, that would equal to:

  • $1,000 / $2.14 = 467 clicks
  • 467 x 6.5% = 30 conversions
  • 30 x $33 = $990

You would get exactly 30 conversions costing $33 to acquire. Great. But, how much is each customer worth to you? Read my other article on maximizing customer lifetime value to learn more.

Let’s say that you sell a SaaS product for $60/month. That would equal $1,800/month or $810 in profit from Google Ads.

You get my point.

Next, I will give you tips for maximizing the budget you have.

What small businesses can do with this knowledge

Follow these strategies to determine a reasonable budget for Google Ads while increasing the ROI of campaigns.

Don’t put all of your eggs in one basket

Yes, technically you could invest all of your marketing budgets into PPC. However, there are so many other effective strategies. You need to be omnichannel for the most success.

That means investing in content marketing, SEO, influencer marketing, and PR. They all have unique impacts on a company’s growth and customer acquisition. By only investing in Google Ads, you’re missing out on branding, thought leadership, and organic leads.

Set a max bid that doesn’t go over budget

I’m not saying don’t invest in Google Ads. You just have to be smart about it. The key is to take advantage of Google’s “Maximize Clicks” option under the bidding area of a campaign to begin.

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Artificial intelligence learns how your campaigns and ads operate, finding the sweet spot for your budget

Additionally, enable the “Set a maximum cost per click bid limit” if you do not wish to spend beyond a certain amount per click. If you performed a calculation as I showed you earlier, you will have an estimate of what to enter here.

Focus on conversion rate optimization

CRO will get you the most bang for your buck. Conversion rate optimization is the practice of optimizing fine details to increase the conversions of a Google Ads campaign. In fact, good targeting and testing can increase conversions by 300%!

You aren’t spending any more money. But, you’re making more. Think of it like a Formula 1 car that gets new wheels on the track. It’s already fast, but it becomes even faster.

So, how can you boost the CRO of your ads? Try doing this:

  1. Split test the copy. Calls to action, headlines, offers, etc.
  2. Drive traffic to different pages to see how it affects engagement.
  3. Match the landing page to the ad to avoid confusion.
  4. Split test the audience you’re targeting. 
  5. Invest in retargeting.
  6. Invest in keywords that have the highest CTR and conversions.
  7. Optimize the entire lead generation or sales funnel.

Make sure to read my blog post on increasing PPC conversion rates to get more ideas, too.


Google Ads is as simple as throwing some money at it while it rains customers, right?

Eh, not so fast.

You need to set an optimal budget and optimize campaigns for them to generate worthwhile results.

The first step is looking at the bigger picture. What’s your overall marketing budget and how much would you like to dedicate monthly to Google Ads? Crunch how many conversions you would need to break even or profit.

Then, focus on CRO. Optimize the copy, offer, calls to action, audience, and test the heck out of it. You will find the winning combinations to pour the budget into.

There’s no need to do this all by yourself, though. You’re busy as it is. Try Morphio today for free and see how our marketing security software maximizes your budget and ROI with AI.

Eric Vardon Profile image

Eric Vardon

CEO, Co-Founder @ Morphio

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