How Much Should You Actually Spend on Google Ads?
A Clear, Compassionate, Math‑Driven Guide To Finding You Minimum Viable Budget In Google Ads
Last week I met with someone on Google Meets who was trying to figure out their Google Ads budget, and they looked…tired.
My Google Ads coaching client was not confused, not clueless, rather just overwhelmed by the sheer amount of conflicting advice out there about spending money on Google Ads.
Then they asked the question almost everyone asks at some point:
“How much should I actually be spending on ads in Google?”
It’s a completely fair question.
And honestly, it’s one you should be asking and figuring out BEFORE running ads.
So instead of guessing or relying on “industry averages,” I walked them through the math — gently, step by step — because once you see the numbers, everything gets clearer and a lot less stressful.
This is the same math I’ve used with clients since 2017, and it still works in 2026.
Let’s walk through it together, in todays post.
Also if you want to review all my budgeting posts I created a hub page where I break everything down. This page will be a guide that grows with the blog so feel free to book mark it: The Google Ads Cost & Minimum Budget Hub
Step 1: Find Your Breakeven CPA (Your True North)
Most people set a budget based on what feels reasonable. But Google Ads doesn’t run on feelings — it runs on math.
Here’s the simplest place to start:
Example
Product price: $100
Cost of goods (COGS): $40
Gross profit: $60
If you spend $60 to get a customer, you break even. You don’t lose money, but you don’t make any either.
That $60 is your Breakeven CPA.
This number matters because it tells you the maximum you can pay for a conversion before your ads start hurting your business instead of helping it.
Most people feel relief when they see this number — it gives you something solid to stand on
Step 2: Calculate Your Actual CPA (What Google Ads Is Really Charging You)
Now let’s layer in your Google Ads performance.
Say:
Your average CPC = $5
Your website converts at 5%
Here’s the math:
20 clicks × $5 = $100 per conversion
Why 20 clicks? Because at a 5% conversion rate, only 1 out of 20 visitors becomes a lead or customer.
So your Actual CPA = $100.
Now compare the two:
Breakeven CPA: $60
Actual CPA: $100
This is where my Google Ads Coaching clients usually exhale and say, “Oh… that explains a lot.”
And it does. It’s not that Google Ads “doesn’t work.” It’s that the math isn’t lining up yet — and that’s fixable.
Step 3: Understand Google’s Minimum Data Needs (Your Budget Floor)
Here’s the part I feel like Google Ads experts like myself scream about on LinkedIn all day and my coaching clients don’t necessarily know until we talk…
Google needs enough data to learn who your buyers are.
If your target CPA is $50 but you’re spending $20/day, Google simply doesn’t have enough conversions to understand what “success” looks like.
This isn’t a moral failing. It’s not you doing anything wrong. It’s just how the system works.
If you want the full breakdown, I have a post on the 100‑click rule — but here’s the short version:
No data = no learning = no performance.
This is why I help clients set a minimum viable budget — a floor that keeps the algorithm stable.
Example
If you want:
30 conversions/month
CPA target = $50
Then your minimum budget is:
30 × $50 = $1,500 per month
Anything below that makes Google guess. And guessing is super duper expensive in Google Ads.
Step 4: The Reality of Scaling Google Ads (Diminishing Returns)
On the other end of the spectrum, some people say:
“Okay, I get it. Let’s spend $100k tomorrow.”
And I love the enthusiasm, but here’s the truth:
Google Ads doesn’t scale in a straight line. It scales in a curve.
When you first start spending, you’re buying the highest‑intent traffic — the people closest to buying. That’s where your ROI is strongest.
But as you increase spend, Google has to reach further into colder audiences.
What scaling actually looks like:
$5k spend: 100 leads at $50 each
$10k spend: ~160 leads at $75 each
$50k spend: CPA jumps to $150 because you’ve exhausted the high‑intent pool
This isn’t failure. This is just how demand curves work.
In coaching calls, I help clients find their inflection point — the place where spending more stops being helpful and starts being wasteful.
Two red line graphs comparing perceived vs actual Google Ads growth. Top graph shows steep linear growth labeled ‘What everyone thinks Google Ads growth looks like.’ Bottom graph shows a curve that flattens, labeled ‘What it really looks like,’ with a green ‘sweet spot’ marked early in the curve.
Visualizing the Growth Curve
If you're more of a visual learner, here's a simple diagram I use in coaching sessions to explain how Google Ads growth actually works.
The top line shows what most people think happens — a straight climb with every dollar spent.
The bottom curve shows what really happens — fast early growth, then a plateau as you reach colder audiences.
The green “X” marks your sweet spot — the point where your spend is still efficient and profitable.
This visual helps clients understand why scaling too fast can backfire, and why finding your inflection point matters.
Why So Many People Think Google Ads “Doesn’t Work”
Because doing this math is uncomfortable.
It forces you to look at:
Your margins
Your conversion rate
Your landing page
Your offer
Your industry’s CPCs
And sometimes the numbers reveal that something upstream that feeds your ads needs attention.
That’s not a reason to feel discouraged. It’s a reason to feel empowered — because now you know exactly where to focus.
The Takeaway From This Budgeting Exercise
You’re not supposed to know this off the top of your head. You’re not supposed to magically guess the right budget. You’re not supposed to “just know” what Google Ads needs.
You’re running a business. You’re juggling a lot. And this math is genuinely confusing until someone walks you through it.
So here’s the simplest way to ground yourself:
Find your Breakeven CPA
Calculate your Actual CPA
Set a budget that gives Google enough data to learn
Fix your conversion rate before increasing spend
Because no matter how much you spend, you can’t outspend a math problem.
FAQ: Google Ads Budgeting
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Start with two numbers:
Your breakeven CPA (how much you can afford to pay for a customer)
Your actual CPA (what Google is currently charging you)
Then set a budget that gives Google enough conversions each month to learn. A simple formula is:
Minimum Monthly Budget=Target CPA×Desired Monthly Conversions
If your target CPA is $50 and you want 30 conversions, your minimum budget is $1,500/month.
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Your breakeven CPA is the maximum amount you can spend to acquire a customer without losing money. It’s calculated by subtracting your cost of goods (COGS) from your product or service price.
Example:
Price: $100
COGS: $40
Gross profit: $60
Your breakeven CPA = $60.
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Most accounts need 20–30 conversions per month to stay stable. A good starting point is:
Monthly Budget=Target CPA×20–30
If your target CPA is $50, that’s $1,000–$1,500/month.
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Your minimum budget depends on your CPC and conversion rate, but generally you need enough budget to generate:
At least 100 clicks per month, or
20–30 conversions per month
If your CPC is $5, then 100 clicks = $500/month. If your target CPA is $50, then 20 conversions = $1,000/month.
Your true minimum is whichever number is higher.
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Google’s bidding system learns by observing patterns in who converts. If you don’t give it enough conversions or clicks, it can’t identify your ideal customer — which leads to unstable or expensive performance.
No data = no learning. No learning = no performance.
Consistent conversion volume keeps the algorithm stable and helps Google find more of the right people.
