How much should you spend on Google Ads?
How to set an ad budget from what a customer is worth, what management costs, and the minimum below which advertising cannot work.
Prices reflect the Calgary and Alberta market. Last reviewed September 2026.
Two separate numbers
Google Ads has two costs that get confused constantly. There is the media — what you pay Google for clicks — and there is management, what you pay someone to run the account. They are billed separately and should be assessed separately.
Your card is charged directly by Google for the media. A management fee is what the agency charges for the work.
What management costs
| Small account (under $2,000/mo spend) | $500 – $900 / month, or a fixed monthly fee |
|---|---|
| Mid account ($2,000 – $10,000/mo spend) | $900 – $2,000 / month |
| Larger or multi-campaign account | $2,000 – $5,000+ / month |
| Percentage-of-spend model | Typically 10 – 20% of media spend |
| One-off account build | $1,000 – $3,000 |
| One-off audit and clean-up | $500 – $1,500 |
We charge a fixed fee rather than a percentage, so we never earn more by recommending you spend more. Both models exist in the market; just make sure you know which one you are on.
Setting the media budget properly
Work backwards from what a customer is worth, not from what feels affordable.
- Take your average revenue per customer and multiply by your gross margin — that is the contribution
- Estimate what share of enquiries become customers
- Divide: contribution × close rate = what an enquiry is worth to you
- Your target cost per enquiry should sit comfortably below that number
Example: a customer worth $2,000 at 40% margin contributes $800. If one in four enquiries closes, an enquiry is worth roughly $200. Paying $60 for one is a good trade; paying $180 might still be, depending on how much volume you want.
The practical minimum
Below roughly $600 to $1,000 a month in media, most local accounts cannot gather enough data to optimise on. Clicks in competitive categories run $4 to $20 each in Calgary; at $300 a month you might buy 30 clicks, which tells you almost nothing.
If your budget is genuinely under that, put it into local SEO, your Google Business Profile and reviews instead. That produces enquiries without a per-click cost.
What drives click cost
- Category — legal, dental, insurance and home services are expensive; niche B2B is often cheap
- Location — Calgary sits mid-range for Canada, below Toronto and Vancouver
- Competition — the more advertisers, the higher the floor
- Quality — relevant ads and matching landing pages genuinely lower your cost per click
- Time of year — seasonal categories get more expensive in season
Where budgets get wasted
- No conversion tracking, so Google optimises toward clicks rather than calls
- Broad match keywords with no negative list
- Everything pointing at the homepage
- Default location settings that include people merely "interested in" your area
- Ads running at hours when nobody answers the phone
All five are configuration problems, not budget problems, and all five are fixable in an afternoon.
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