How much do Google Ads cost a small business in the UK?

There is no fixed price for Google Ads. You choose how much to spend, and Google charges you for the clicks your ads receive within that budget. So the useful question is not "how much do Google Ads cost?" but "how much do I need to spend to find out whether they work for my business, and what else will I pay on top?"

This guide separates the three costs that usually get blurred together, explains how Google actually bills a budget, and shows how to set a test budget from your own numbers rather than someone else's average. For what the rest of your marketing costs, see what marketing costs in the UK.

The three costs

Quotes and articles often mix the first two together. They are different things, and it helps to keep them apart when you compare options.

Ad spend: what you pay Google

On Search campaigns using cost-per-click bidding, you pay when someone clicks your ad. Google's own definition of cost-per-click is that you set a maximum you are willing to pay for a click, and the amount you are actually charged is often less.

What a click costs varies enormously by industry, location and competition. Rather than rely on an average from other businesses, look up estimates for the searches you care about. Google's Keyword Planner, free inside a Google Ads account, shows estimated bids for appearing at the top of the page for the keywords you enter, along with how often they are searched.

How Google bills your budget

This is worth understanding before you choose a figure. You set an average daily budget, but Google does not treat it as a hard daily cap. According to Google's help page on average daily budgets, for most campaigns:

• on any single day, you can be charged up to twice your average daily budget;
• over a month, you will not be charged more than 30.4 times your average daily budget, the average number of days in a month.

So, under Google's spending limits, a £20 average daily budget could spend £40 on a busy day, but no more than about £608 across a month. Plan your budget monthly, and set the daily figure by dividing by 30.4.

Google's UK surcharge

For ads served in the United Kingdom, Google adds a 2% UK DST Fee to your invoice or statement. Google says it has applied the fee since 1 November 2020, and that it is driven by the UK's Digital Services Tax. On £1,000 of ad spend, that is £20.

How VAT applies to your Google Ads invoices depends on your business's VAT position. Check that with your accountant rather than assuming.

Management: what it costs to run the account

Someone has to set up the account, choose the keywords, write the ads, build or choose the landing page, set up tracking, and then keep improving it. The options:

Ours is the last kind. Our Google Ads launch is a fixed £2,500, taking about two weeks, followed by 30 days of changes as the first data comes in. After that, monthly management is optional and quoted separately, or you can run it yourself with a properly built account.

Two things to check with any option. First, whether the fee is a share of ad spend, which gives the manager a reason to recommend spending more. Second, whether the account will be in your name: Google Ads has access levels up to Admin, and someone in your business should hold Admin access to your own account.

The costs around it

These are the costs that are easy to leave out of a budget:

• A landing page. Sending ad clicks to a homepage wastes a lot of them. A page built for the search, following a clear structure, is often the best money spent in the whole account.
• Tracking. Without enquiries recorded as conversions, neither you nor Google can tell which clicks were worth paying for. See the five GA4 reports you need for what to set up.
• Images and video, if you use campaign types that show visual ads.
• Your time, answering the enquiries the ads produce. It is the point of the exercise, but it is still time.

How to set a test budget from your own numbers

This is the part that matters most. You need three numbers, and you can get all of them yourself:

1. Estimated cost per click for your main searches, from Keyword Planner.
2. Your website's enquiry rate: of the people who visit, how many get in touch? Your analytics will tell you, or use an honest estimate.
3. What an enquiry is worth to you: how many enquiries become customers, and what a customer is worth in profit.

Then work it through. An illustration with round numbers, to show the method rather than to suggest the figures:

• Keyword Planner suggests clicks around £3.
• One visitor in 25 enquires on your site.
• So each enquiry costs roughly 25 × £3 = £75 in clicks.
• To see whether the ads produce enquiries, you want enough clicks that zero would be surprising. At one in 25, 200 clicks would normally produce around eight enquiries.
• 200 clicks at £3 is £600, plus the 2% surcharge: about £612 for the test.

If one enquiry in three becomes a customer worth £1,000 in profit, an enquiry is worth about £333 to you, and £75 an enquiry is a good deal. If a customer is worth £150, it is not, and no amount of management will fix the arithmetic. That is worth knowing before you spend anything, and we work through the whole sum in is Google Ads worth it for a small business?

We go through what to do when the numbers do not add up in why Google Ads are not working, and through budgeting more generally in how much a small business should spend on marketing.

What makes clicks cheaper or dearer

You cannot control what competitors bid, but you can control a lot:

• Relevance. Google's Quality Score, a diagnostic tool, looks at expected click-through rate, ad relevance and landing page experience. Tight groups of keywords with ads and pages that match them are the foundation.
• Wasted searches. The search terms report shows what people actually searched before clicking. Adding irrelevant searches as negative keywords stops paying for them.
• Location. Google's default location option also reaches people who have shown interest in your area. For a business that only serves people nearby, targeting people in the area may waste less.
• Timing. If enquiries outside working hours go unanswered, an ad schedule can stop you paying for them.
• Match types. Broad matching finds more searches, including more irrelevant ones. Start tighter and widen deliberately.

Search, or the other campaign types?

Everything above assumes Search campaigns, where your ads appear against what people type. Google offers other campaign types, and they spend money differently.

Performance Max is, in Google's words, a goal-based campaign type that can reach all Google Ads inventory, including YouTube, Display, Search, Discover, Gmail and Maps, from a single campaign. It relies heavily on automation and on the conversion data you give it, and it needs images and ideally video. For a small business with little conversion data yet, it can be hard to see where the money went. We suggest proving a Search campaign first, then testing Performance Max once tracking is solid and there are conversions for it to learn from.

Display and video campaigns show image and video ads on websites, apps and YouTube. They reach people who are not searching, so they are closer to Meta ads in the job they do, and are usually a later step for a small business.

Whichever you use, the same rules apply: track conversions, judge on cost per enquiry or sale, and keep the account in your own name.

What the first three months usually look like

A new Google Ads account rarely performs at its best in the first week, because the account has no history and you do not yet know which searches convert. A realistic pattern:

• The first two weeks: the account goes live, the first clicks arrive, and the search terms report starts to show what people actually searched. The main job is removing irrelevant searches and checking tracking works.
• Weeks three to six: enough data to see which keywords and ads bring enquiries, and which bring clicks that go nowhere. Money moves towards what works.
• Months two and three: a clearer picture of cost per enquiry, and a decision: scale up, change the offer or landing page, or stop.

Set the date for that decision before you start, along with the cost per enquiry that would count as success. It is much easier to be honest about results against a number you chose in advance.

Before you set a budget

Tick these off first. The ticks are saved in this browser.

• I have looked up estimated click costs for my main searches in Keyword Planner.
• I know roughly how many website visitors it takes to get one enquiry.
• I know what an enquiry is worth, in profit, to my business.
• I have worked out a test budget that buys enough clicks to judge.
• I have allowed for the 2% UK DST Fee, and checked VAT with my accountant.
• My daily budget is my monthly figure divided by 30.4.
• Enquiries are tracked as conversions, and I have tested it.
• Clicks will go to a page built for the search, not the homepage.
• If someone else manages it, the account is in my name and I hold Admin access.
• I know whether the management fee is fixed, monthly or a share of spend.

If you would like it set up properly from the start, our paid ads service builds and launches accounts from £2,500 to £6,000, and the Google Ads launch is a fixed £2,500.