How much should I spend on Google Ads?

A budget that's too small spreads clicks so thinly that you can't tell what's working. One set without a target cost per customer can spend a lot before anyone notices it isn't profitable. Work through the numbers in order:

1. Customer value: the gross profit from an average customer over a sensible period, not just the first order.
2. Conversion rates: the share of clicks that become leads, and of leads that become customers.
3. Break-even CPC: customer value multiplied by the share of clicks that become customers. Above this cost per click, each customer costs more than they're worth.
4. Market CPC: estimates for your keywords and locations from Google's Keyword Planner.
5. Budget: the clicks needed for your customer target, multiplied by the expected cost per click.

The Google Ads Budget & Break-even CPC Calculator does this arithmetic and shows the results as ranges.

Then run long enough to collect meaningful conversion data before judging, cut keywords and search terms that don't convert, and move budget to the campaigns with the best cost per acquisition. Revisit the numbers whenever prices, margins or conversion rates change.