---
title: "How Much To Spend On Google Ads In Australia | Gudu"
description: "Work out a Google Ads budget from the auction backwards: what a click costs, how many you need, and the point where more spend stops paying for itself."
canonical: https://gudu.com.au/how-much-to-spend-on-google-ads/
---

# What you should actually spend on Google Ads in Australia

By Adam La Cioppa · August 18, 2026

Every prospect asks the same question in the first ten minutes, and it can’t be answered yet. “What should we be spending on Google Ads?”

I understand why they ask. A number is easier to take to a board than a plan. But a budget is an output. It falls out of what a customer is worth to you, what a click costs in your category, and how many customers you can actually service this quarter.

Plenty of Australian businesses are out looking for someone to hand them that number. “google ads agency” alone gets around 4,500 searches a month here (Ahrefs, August 2026). Before you hire any of us, do the arithmetic yourself. It takes twenty minutes and it changes the conversation.

## Start with what a customer is worth

Two numbers, before you look at a single keyword.

The first is gross margin per customer. Not revenue. Margin, after materials, delivery and the labour that goes into the job. Sell a $2,000 job where $1,200 walks out the door in costs, and you have $800 to work with.

The second is how long you’ll wait to get it back. A plumber wants the job to pay for itself the same week. A software business with a two-year average tenure can buy a customer at a loss in month one and sleep fine. Same margin, completely different budget, because the payback window is different.

Decide what share of that margin you’re prepared to hand over to buy the customer, and you have your ceiling. Say you’ll give up half of the $800. Your ceiling is $400 a customer. Everything after this is checking whether Google can deliver under it.

Most owners I meet have never written that ceiling down. It’s the single most useful thing on this page.

## The auction sets the floor, not you

You don’t decide what a click costs. Other advertisers do, and there’s nothing you can do about their balance sheets.

A click on a personal injury lawyer term in Sydney and a click on a t-shirt term are not in the same universe of price. Both are “Google Ads”. In the categories where one customer is worth tens of thousands, the auction has already priced that in, and your $1,500 a month buys a handful of visits.

Get the real range before you commit. Google’s Keyword Planner will give you a top-of-page bid estimate for your terms in your state, free, in about five minutes. Treat it as a range, not a quote, and be suspicious of the low end. That’s the number the auction quietly ignores when everyone bids up on a Monday morning.

Budget doesn’t buy you a better price either. It buys you a share of what’s available. If your daily budget runs out at 11am, you have simply chosen to sell nothing in the afternoon.

## Do the arithmetic before you spend anything

Chain it together and you get a cost per customer you can test against your ceiling. The numbers below are invented for the example. The sequence isn’t.

| Step | Example | Where the number comes from |
| --- | --- | --- |
| Cost per click | $6 | Keyword Planner, or your existing account |
| Clicks per enquiry | 25 | A landing page converting at 4% |
| Cost per enquiry | $150 | 25 clicks × $6 |
| Enquiries per sale | 4 | Your sales team’s close rate of 25% |
| Cost per customer | $600 | 4 enquiries × $150 |

Against a $400 ceiling, that business is losing $200 a customer. Three of those five numbers can move. The close rate is a sales problem, the page conversion rate is a website problem, and the cost per click responds to better targeting and better ads. None of them get fixed by increasing the budget.

That’s the whole test. If the maths only works when you assume everything goes right, it doesn’t work.

## What “too small to bother” looks like

There is a floor below which paid search can’t tell you anything.

Say your ceiling supports twelve clicks a week. You’ll get one enquiry a fortnight if you’re lucky, and you will never know which keyword, ad or landing page produced it. Google’s automated bidding is worse off than you are: it needs a steady flow of conversions to learn from, and a trickle teaches it nothing.

If that’s your situation, don’t run Google Ads badly. Spend the money on the things that make the eventual campaign cheaper. Fix the page people land on. Get your Google Business Profile in order and chase reviews. Sort out organic search, which costs time instead of media. Come back to the auction when a month of spend can buy you enough data to make a decision with.

Small budgets can work. They work when they’re narrow: one city, one service, the terms where someone is clearly ready to buy, and nothing else. What kills small accounts is trying to look like a big one.

## Where the money leaks

Every underperforming account I’ve reviewed leaks in the same few places.

Broad match with a thin negative keyword list, so you pay for searches that were never yours. Search Partners and Display left switched on inside a search campaign because they were on by default. Geography set to “people interested in your area” rather than people in it. Ads running at 3am for a business that answers phones at 8. And a landing page that makes people work for the thing the ad promised.

None of that is exotic. It’s the plumbing, and it’s where most of the recoverable money sits. If you want the mechanics of how the platforms decide who sees your ads and what you pay, we’ve written that up in [behind digital ad delivery](https://gudu.com.au/behind-digital-ad-delivery/).

Brand terms deserve their own argument. Bidding on your own name looks like a rort until a competitor does it to you, and then it’s cheap insurance. Just don’t let brand clicks flatter your reporting. Split them out and judge the rest of the account on its own.

## What you should pay someone to run it

Two models dominate in Australia, and both have a flaw worth naming.

A percentage of spend, usually somewhere in the teens, pays your agency more when you spend more. Nobody sets out to abuse that, but it does mean the person advising you to increase the budget is also the person invoicing on it. A flat monthly fee removes that, and introduces the opposite problem: at a certain point the account is too small for the fee to make sense for either side.

The honest test is simple. The fee should be smaller than the improvement it produces. If an account is spending $4,000 a month and a $2,000 fee lifts efficiency by 15%, you’ve paid $2,000 to save $600. That’s not a management arrangement, it’s a subscription to a report. At that spend, buy a proper setup and a quarterly review, and run the day to day yourself.

Ask any agency to tell you what they’d need to change to justify their fee before you sign. If the answer is a list of tasks rather than a number, keep looking.

## Efficiency is what earns you more budget

The best argument for a bigger budget isn’t ambition. It’s a falling cost per customer.

Southern Phone is the clearest version of that we’ve run. When we rebuilt their media strategy and buying, account cost per acquisition came down by $22, and the business then chose to reinvest 68% more in spend year over year. The extra budget followed the efficiency, in that order. The full story is in the [Southern Phone case study](https://gudu.com.au/southernphone/).

That’s the sequence to hold your agency to. Prove the unit economics on a small number, then scale the number.

## So what should you spend?

As much as you can while your cost per customer stays under your ceiling, and not a dollar more.

That’s a real answer, and it’s specific to you the moment you’ve done the four lines of arithmetic above. It also has an end point most budget conversations avoid: there’s a level of spend where the next customer costs more than they’re worth, and buying them anyway is just an expensive way to look busy.

If you want a second opinion on your own numbers, that’s most of what we do in [paid search](https://gudu.com.au/services/advertising/paid-search/). Bring your margin and your close rate. We can work out the rest together.