The short answer
Plan a Google Ads budget in three parts: the media spend you pay Google, the management and setup you pay an agency, and a set of assumptions (cost per click, conversion rate, close rate) that you will replace with real data as soon as the campaign runs. Treat any lead number before launch as a scenario, not a forecast.
Three parts of the budget
| Part | Paid to | Example with us |
|---|---|---|
| Media spend | Google, on your card | Your choice, for example £15 to £40 a day |
| Management | Agency | £229 a month |
| Setup | Agency, once | £149 one-off |
The assumptions that matter
- Cost per click (CPC): what a click costs in your market. Google's Keyword Planner gives ranges; real CPCs appear once the campaign runs.
- Conversion rate: the share of clicks that become an enquiry. It depends on the page, the offer and the match between search and page.
- Close rate: the share of enquiries that become customers. Only you know this.
- Value per customer: average first-job value or margin.
Worked example (hypothetical numbers)
Assume £600 a month of media spend, a CPC of £2.50, a conversion rate of 6% and a close rate of 30%.
| Step | Calculation | Result |
|---|---|---|
| Clicks | £600 / £2.50 | 240 |
| Expected enquiries | 240 x 6% | 14.4 |
| Expected customers | 14.4 x 30% | 4.32 |
| Total monthly cost | £600 media + £229 management | £829 |
| Cost per enquiry | £829 / 14.4 | £57.57 |
| Cost per customer | £829 / 4.32 | £191.90 |
| One-off setup (not in the monthly cost) | Paid once | £149 |
The enquiry and customer figures are expected values from the assumptions, so they can be fractions: 4.32 customers a month means "about four in a typical month, sometimes three, sometimes five", not 4.32 people. The calculation keeps full precision and only rounds for display, which is why the cost per customer is £191.90 rather than the £207 you would get by rounding to four customers first. The budget planner uses the same arithmetic and shows the same figures for these inputs.
Change any one assumption and the result moves a lot. That is the point: the plan tells you which numbers matter, so you watch them from the first week.
Why small changes matter
If the conversion rate is 3% instead of 6%, enquiries halve. If the CPC is £4 instead of £2.50, clicks fall by over a third. Improving the landing page often moves the conversion rate more than any bid change, which is why ads and website quality are linked.
How daily budgets work
In Google Ads you set an average daily budget, not a hard daily cap. According to Google's help page on spending limits, for most campaigns:
- on any single day, spend can reach up to 2 times the average daily budget, when Google expects more useful traffic;
- over a calendar month, you are not charged more than 30.4 times the average daily budget (30.4 being the average number of days in a month), so busy days are balanced by quieter ones;
- if you change the budget part way through a month, the rest of the month is paced to the new daily budget for the remaining days;
- some campaign types work differently (for example "Pay for Conversions" campaigns have no daily spending limit but still have the monthly limit).
So a £20 average daily budget means up to £40 on a single busy day and no more than £608 (20 x 30.4) charged across the month, for most campaign types. Plan around that monthly limit rather than individual days, and recheck Google's page before relying on these rules, because platform rules change.
What to watch in the first weeks
- Search terms: are the right people seeing the ads?
- Conversion tracking: is every enquiry recorded once, and only once?
- Cost per enquiry: is it heading towards what your margin can carry?
- Follow-up: are enquiries answered quickly?
Your next step
Use the paid-search budget planner to run your own scenarios and download the assumptions sheet. See what Google Ads management includes and the Ads prices, or read SEO or Google Ads first?.
Sources
- About spending limits, Google Ads Help, checked 16 October 2026.