How Much Do Google Ads Cost for a Small Business?

For most small trade businesses, Google Ads costs somewhere around $1,000 to $3,000 a month in ad spend, and that's before anyone charges you to run them. You pay each time someone clicks your ad, and in home services a click usually costs about $8, so the money goes faster than most owners expect.

If you're weighing ads against Google's pay per lead option, read Are Google Local Services Ads Worth It? too. And if you'd rather stop paying for every click, start with what local SEO is and whether it works.

That's the short answer, but it doesn't tell you whether it's worth it, and that's what most owners are really asking. I hear the same worry on a lot of calls: "I don't want to pay $400, $800 or $1,000 a month for something that won't have any return." That's fair. So let's look at where the money actually goes.

How does Google Ads pricing work?

There's no monthly fee from Google for ads. You pick the searches you want to show up for, like "water heater repair" or "roof leak," you set a daily budget, and Google charges you each time someone clicks. If nobody clicks you don't pay, but you also don't get a call.

The daily budget is more of an average than a hard cap. Google says a campaign can spend up to twice your daily budget on a busy day, but over a month it won't charge more than about 30 times what you set. So if you set $50 a day, plan on about $1,500 a month.

How much does a click cost for a contractor?

The latest LocaliQ and WordStream numbers put the average click for home and home improvement businesses at about $8, which is higher than the all-business average of about $5. Some trades run much higher than that, because roofing, HVAC and emergency plumbing jobs are worth a lot and plenty of companies are bidding on the same searches.

The same report puts the average cost per lead for home businesses at about $90. That's per lead, though. A lead there means someone who called or filled out a form, so the cost of an actual job is higher once you count the people who never book.

Now do the simple math. A $1,000 month at about $8 a click buys roughly 125 clicks, and at about $90 a lead that's around 11 people reaching out. Whether that's worth it depends on what one of your jobs is worth and how many of those 11 you close. For some trades that's a great month. For others it barely covers the ads.

Why do some owners lose money on Google Ads?

Usually the ads are fine and the clicks land somewhere that doesn't turn them into calls. The most common problems I see are:

• The ad sends people to a home page that doesn't mention the job they searched for.
• The site is slow or hard to use on a phone, so people leave before they call.
• Nobody answers the phone during the day, so the click you paid for goes to the next company.
• The ad shows up for searches you don't even do, like jobs outside your area or "free" and "DIY" searches.
• Nobody's checking which searches are bringing in calls, so the budget keeps paying for the ones that don't.

On top of the ad spend, most agencies charge a fee to run the account, so ask what that fee is and what you get for it before you sign anything. Get it in writing.

Is Google Ads better than showing up on Google for free?

They do different jobs. Ads can put you at the top of Google this week, which is why they're useful when the phone's quiet and you need work now. But the calls stop the day you stop paying. Showing up in the Maps results and the regular results under them takes longer to build, and once it's working you don't pay for each click.

A lot of owners end up running some ads while they build the free side, and then they lean less on the ads as the free calls pick up. Either way, the ads only pay off if your Google profile, your website and your phone are ready for the people who click.

One thing to try this week

Work out what one lead is worth to you.

1. Take the average price of a job you'd want from Google.
2. Write down how many people who call you end up booking, like 1 in 3 or 1 in 4.
3. Divide your average job by that number. If a job is $900 and you book 1 in 3, a lead is worth about $300 to you.

If that number is well above $90, ads can make sense for you. If it's close to $90 or below it, fix your website and your Google profile first.

Do you know what a single phone call is worth to your business?