Is Google Ads worth it for your business? Do the break-even sum first

Yes, as long as a customer is worth comfortably more to you than it costs to win them through ads. Everything else follows from one question: is there profit in it for you? The good news is that you can answer it before you spend a penny, using numbers you already have or can get for free.

You'll see articles quoting a return per pound spent on Google Ads. Always ask where that figure came from, because an average across other businesses tells you almost nothing about yours. Your click prices, your website and your margins are your own.

The break-even sum

You need four numbers:

1. Cost per click: what Google charges you when someone clicks your ad. Google's Keyword Planner, which is free inside a Google Ads account, estimates it for the searches you type in.
2. Visitors per enquiry: how many people land on your website for every one who gets in touch. Your analytics will show you, or you can make an honest estimate.
3. Enquiries per customer: how many enquiries it takes to win one customer. Your own records will tell you.
4. Profit per customer: what a new customer is worth to you in profit over the whole time they stay with you.

Then multiply the first three together:

Cost per customer = cost per click × visitors per enquiry × enquiries per customer

Here it is with round numbers, which are there to show the method rather than to suggest real figures:

• Clicks cost about £2.
• It takes 20 visitors to get one enquiry.
• It takes 4 enquiries to win one customer.
• So a customer costs £2 × 20 × 4 = £160.

If a customer is worth £600 in profit, £160 to win one is a good deal and ads are worth testing. If a customer is worth £100, you lose money on every sale until something changes: a better page for the ads to land on, more of those enquiries turned into customers, or a higher-value offer. How big the gap needs to be is your judgement, not a rule, but it has to cover the cost of running the account and still leave you a profit worth having. Google also adds a 2% fee to UK ad spend because of the UK's Digital Services Tax, and any management fee comes on top, so include both.

Put your own four figures in below and the sums are done for you. Nothing is filled in until you type it, and nothing leaves your browser.

• Your cost per click, what Google charges on average when someone clicks your ad.

  £a click
  Where to find it

  Open Keyword Planner, which is free inside a Google Ads account, enter the searches you would bid on, and use the cost per click it estimates for them. If you already run Google Ads, the average cost per click in your own account is better than an estimate.

  Covered in What Google Ads cost in the UK.

• Visitors per enquiry, how many people visit your website for each one who gets in touch.

  1 enquiry for everyvisitors
  Where to find it

  From your analytics: visitors in the last full month divided by enquiries in the same month. If one visitor in 25 gets in touch, enter 25. If enquiries are not tracked yet, count last month's by hand, or make an honest estimate and treat the answer as rough.

  Covered in The only five GA4 reports you need.

• Enquiries per customer, how many enquiries it takes to win one customer.

  1 customer for everyenquiries
  Where to find it

  From your own records: count the enquiries that led to your last ten customers and divide by ten. If one enquiry in three becomes a customer, enter 3.

  Covered in full above.

• Profit per customer, what a typical new customer is worth to you in profit, not takings, over the time they stay.

  £profit from a customer
  Where to find it

  From last year's figures, or a question to your accountant: what a typical customer brings in over the time they stay, minus what it costs you to do the work.

  Covered in How to split a small marketing budget.

Judge ads on this sum and nothing else. Google says advertising with it has no effect on your ordinary, unpaid ranking, so a losing campaign isn't quietly buying you SEO on the side, and the idea that ads help your ranking is a myth.

When it tends to be worth it

• People search for what you sell, in words you can list, and Keyword Planner shows real volume.
• The need is urgent or specific. People searching for an emergency service or a named product are close to buying.
• A customer is worth a lot compared with a click.
• Your website does its job, with a clear, fast page built for the search people typed.
• You can answer enquiries quickly. Paying for an enquiry and then replying two days later throws the money away.

When it tends not to be

• Hardly anyone searches for it. Ads can't create demand that isn't there.
• The sum doesn't work, even with realistic improvements.
• Nothing counts your enquiries, so nobody can tell which clicks became customers.
• The landing page is weak. Fix that first, using a landing page structure that converts.
• You can't take on more work.

Why it "didn't work" before

If you tried Google Ads once and decided they don't work, ask whether they were ever set up to:

• Was anything counting your enquiries? Without conversion tracking, the setup that records an enquiry as a result, nobody knew what worked.
• Which searches were you paying for? The search terms report, which lists what people actually typed before clicking, often shows money going on searches you'd never have chosen.
• Where did the clicks land? Sending them to a homepage instead of a page written for that search loses a lot of them.
• Were there enough clicks to judge? A small budget over a short time rarely gives a fair test.
• Was the location setting right? The setting Google recommends on Search also reaches people who have shown an interest in your area, not just people who are in it.

If any of those rings a bell, why your Google Ads aren't converting goes through each one in turn.

How to run a fair test

1. Do the break-even sum, and write down the cost per enquiry that would count as success.
2. Set up something to count enquiries, then test it by making one yourself.
3. Build a landing page for your main service, meaning the page people arrive on after clicking.
4. Start with a few closely related searches that you know convert, rather than everything at once.
5. Set a budget that buys enough clicks to judge. If one visitor in 25 enquires, a few hundred clicks is a sensible minimum.
6. Agree a date to decide whether to scale up, change something or stop.

Before you set the daily figure, check how Google bills a budget in what Google Ads cost, and weigh the rest of your spending against what marketing costs in the UK.

Before you spend

With the break-even sum done, three things decide whether a test is fair:

• Something counts my enquiries, and I have tested it by making one.
• Clicks will land on a page built for the search.
• I have a test budget and a decision date, both written down before the money goes out.

When you're ready to test, our Google Ads launch is a fixed £2,500 and includes 30 days of changes as the first data comes in.