Google Ads on a Small Budget

Setting the daily budget

Take your monthly budget from chapter three of Paid Ads for Small Businesses. Divide by thirty (Google charges per day, not per calendar month). That's your daily budget. For a three hundred pound monthly budget, that's ten pounds a day. For a thousand pounds a month, about thirty-three pounds a day. Set this as the campaign daily budget and don't change it for the first six weeks of the test.

Note that Google can spend up to twice your daily budget on a single day, balancing back over the month. This is normal. Don't panic if you check the account on Tuesday and see eighteen pounds spent on a ten-pound daily budget. Wednesday will be lower. The monthly total is what matters.

Manual cost-per-click bidding

Manual cost-per-click bidding means you set the maximum amount you're willing to pay for a click, per keyword. The platform never bids more than that for you. The bid you set isn't usually what you pay - that's the next-highest bidder's amount plus a penny - but it's the ceiling. Setting it manually keeps you in control of where the budget goes and surfaces problems faster than automated strategies, which can hide them inside opaque optimisation.

Calculate your starting bid by working backwards from the maximum cost per customer you wrote down in chapter three of Paid Ads for Small Businesses. Divide by an estimated enquiry-to-customer rate (one in ten is a sensible starting estimate for most service businesses) to get a maximum cost per enquiry. Divide that by an estimated click-to-enquiry rate on your landing page (one in fifteen is a sensible starting estimate) to get a maximum cost per click. That's your starting bid.

If the platform's keyword planner suggests the typical bid for your keyword is well above your maximum, that keyword probably isn't viable on your budget and economics. Either pick narrower keywords with lower competition (long-tail phrases, more specific local modifiers) or raise the maximum cost per customer if the lifetime value supports it.

When to switch to automated bidding

Automated bidding strategies need conversion data to work. Google's own threshold is roughly thirty conversions in the previous thirty days for the algorithm to optimise reliably. Below that threshold, automated bidding bids randomly and you lose money. Above it, automated bidding can outperform manual cost-per-click by a noticeable margin.

Practical rule for small businesses: stay on manual cost-per-click for the first three months no matter what the platform suggests. After three months, count your conversions over the last thirty days. If it's under twenty, stay on manual. If it's between twenty and thirty, optionally try "Maximise Conversions" with no target. If it's over thirty, you can try "Target Cost Per Acquisition" set to your maximum cost per enquiry from the maths above. Watch the cost per customer for the next thirty days and revert if it gets worse.

Scaling the budget

Once a campaign is paying back at the four-number test from chapter six of Paid Ads for Small Businesses, you can scale. Increase the daily budget in steps of twenty to thirty per cent, no more. Wait two weeks between steps. The platform's algorithms re-stabilise during that two-week window. Doubling the budget overnight almost always raises the cost per customer for at least a few weeks, and many small business owners panic and pull it back, which then trains the platform to spend even less efficiently afterward.

Don't scale a campaign that's only marginally working. If your cost per customer is at your maximum, scaling the budget will usually push it above. Fix the cost per customer first - tighter keywords, better landing page, better follow-up - and only scale once it's comfortably below your ceiling.

Geographic and time-of-day controls

Two settings save small accounts a lot of money. First, location targeting. For a local business, set the radius tightly - the postcode area, the city, the surrounding towns you genuinely serve. Don't tick "include people interested in this area" - it expands the target to anyone Google thinks might be researching the area, which on a small budget is mostly noise. Tick "people in this area" only.

Second, ad scheduling. If your business takes enquiries that need a same-day response and you only answer the phone between 8am and 6pm, schedule the ads to run only during those hours. Out-of-hours clicks for service businesses convert badly because the customer expected to reach someone immediately. Restricting the schedule typically improves the cost per customer noticeably even though it reduces total clicks.

What to leave the platform alone about

The platform will offer recommendations almost weekly: increase budget, broaden keywords, switch on smart bidding, add this audience expansion. Most of them are designed to increase your spend, not your customers. Read the recommendation tab if you want, apply nothing automatically, and check any change against the four-number monthly review before keeping it. The single most valuable habit on a small Google Ads account is leaving things alone for long enough to read what they actually do.

What to do this week

Calculate your starting maximum cost-per-click bid using the maths above. Set the campaign to manual cost-per-click bidding. Apply the bid to every keyword in the campaign. Set the daily budget to one-thirtieth of your monthly cap. Tighten the location targeting to where you actually serve customers. Set the ad schedule to the hours you can respond to enquiries. Then close the platform and don't open it again until your weekly Monday review.

In the next chapter we set up conversion tracking - the thing that makes the four numbers from Paid Ads for Small Businesses actually mean something. The earlier eBook Website Analytics covers the wider measurement context.