How much should a small business spend on ads?

Enough to get a readable number of clicks in the category you're in, which varies enormously. The useful version of this question is what one customer is worth to you, because that sets what a click can be worth. We would work that out with you before proposing anything.

How long before ads work?

Ads deliver traffic immediately and useful data slowly. The first few weeks are mostly about finding out which searches are worth paying for and turning off the ones that aren't.

Google, Facebook, or both?

Search ads reach people already looking for what you sell. Facebook ads reach people nearby before they start looking. Most local service businesses start with search, because the intent is already there.

Can I run them myself?

Yes, and plenty of owners do. The parts that are worth paying somebody for are the negative keyword work, the conversion tracking, and having somebody look at it every week rather than every quarter.

What decides what I spend on ads?

Ads are the one channel where you can turn the volume up tomorrow. The wrong campaign spends just as fast as the right one.

Every search ad you have ever seen was placed by an auction that ran in the time it took the page to load. Understanding that auction is most of what separates a budget that works from one that quietly drains.

Nothing on this page is a promise about what you'll pay or what you'll get back. Those depend on your category, your area and your competition, so a real number has to wait until all three have been looked at.

How the Ad Auction Works

Google ranks the ads for a search by combining what each advertiser is willing to pay with how good a match the ad and its landing page are for that search. A better match can beat a bigger bid, and it usually costs less per click when it wins.

That's the whole reason "just raise the budget" is bad advice. The reliable way to bring down what a click costs you is almost always to make the ad and the page it points to match the search more closely.

Your bid The most you'll pay for one click on this search.

The match How closely your ad, and the page it opens, fit what was searched.

The auction Runs on every search, in the time the page takes to load.

Where your ad shows Whether the ad appears, and how high.

What a click costs A better match usually pays less per click.

Outlined in blue: the reliable way to bring the cost of a click down.

The Three Questions That Decide Everything

Before a campaign is worth turning on, these have to have answers. If any one of them doesn't, ads will spend money teaching you the answer, which is the expensive way to learn it.

What is one customer worth to you? Count the whole customer, including the work they come back for. That number sets the ceiling on everything else, and most owners have never written it down.
How many inquiries turn into customers? If one in three people who call become customers, each call is worth about a third of what a new customer is worth to you. That number tells you what a click can cost and still pay off. If you don't know this ratio, the first job is counting it.
What happens when the phone rings? Ads deliver inquiries into whatever process already exists. A business that takes two days to call back will lose most of what it buys, and no amount of campaign work fixes that.

Where Small Budgets Get Wasted

It's almost always the same four places, and all four are settings you can change.

A radius far wider than you will drive The default targeting is bigger than most local businesses want. You pay for clicks from people who will never become customers because they're forty-five minutes away.
Broad keywords with no negatives "Plumber" catches people searching for plumbing jobs, plumbing courses, and how to fix a faucet themselves. A negative keyword list is unglamorous and it's where the savings are.
Every ad pointing at the homepage Somebody who searched for one specific service and landed on a page listing nine has been asked to do the sorting themselves. Most of them leave.
Nothing counted at the other end If calls and form fills aren't being recorded as results, the campaign is optimizing toward clicks, which is the one thing you don't want.

When Ads Are the Wrong First Move

If the website can't take an inquiry cleanly, or the business has no way to answer one quickly, ads amplify a leak. We'll say so rather than take the work, because a campaign that spends a month proving the site doesn't convert is a month nobody enjoyed.

Ads also work best next to something slower. Search results, reviews and a site that reads well keep earning after the budget stops. Ads stop the day you stop paying.

Common Questions

How much should a small business spend on ads?: Enough to get a readable number of clicks in the category you're in, which varies enormously. The useful version of this question is what one customer is worth to you, because that sets what a click can be worth. We would work that out with you before proposing anything.
How long before ads work?: Ads deliver traffic immediately and useful data slowly. The first few weeks are mostly about finding out which searches are worth paying for and turning off the ones that aren't.
Google, Facebook, or both?: Search ads reach people already looking for what you sell. Facebook ads reach people nearby before they start looking. Most local service businesses start with search, because the intent is already there.
Can I run them myself?: Yes, and plenty of owners do. The parts that are worth paying somebody for are the negative keyword work, the conversion tracking, and having somebody look at it every week rather than every quarter.

Not sure whether ads are your next move?

Tell us what you sell and what one customer is worth to you. If ads are the wrong answer we'll say so, and tell you what we would do instead.

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Based in St. Clair Shores, working across Metro Detroit.