How much should a New Zealand business spend on Google Ads?

The short answer

A good Google Ads budget is the amount that brings in the number of customers you want, at a cost per customer you can afford. It is not a percentage of revenue, and it is not whatever an agency suggests. Work backwards from the outcome instead.

Work backwards in four steps

1. Decide how many new customers you want a month. Be realistic about what you can serve.
2. Estimate how many enquiries it takes to win one. If you close one in four, you need four enquiries per customer.
3. Estimate how many clicks it takes to get an enquiry. A website that converts well might turn 3 to 8 percent of visitors into enquiries. A weak one turns far fewer.
4. Multiply by what a click costs in your market. You can see estimates in Google Ads Keyword Planner, and they vary a lot between industries. Google notes that real results also depend on your bid, budget, ad quality, location targeting and your industry.¹

Here is an example, with made-up numbers to show the method. Say you want 5 new customers a month and win 1 in 4 enquiries. That needs 20 enquiries. If 5 percent of visitors enquire, you need 400 clicks. At $3 a click, that is about $1,200 a month in ad spend. Your own numbers will be different, so treat this as a method and not a benchmark.

Then check it against what a customer is worth

If 5 customers cost $1,200 in ads, each costs about $240 to win through ads alone. That is only a good deal if a customer is worth clearly more than that to you over time. If a typical customer is worth $300 in profit, the maths is tight. If it is worth $3,000, you can afford to spend more and grow faster.

Ad spend is not the only cost

Budget for three things: the ad spend itself, the cost of someone managing the account, and the cost of a website that turns clicks into enquiries. Spending well on ads and sending the clicks to a confusing page wastes the lot. If you are unsure about the second part, my web work covers it.

What a small budget can and cannot do

• A small budget works best when it is focused on a few high-intent searches, such as people searching for exactly what you sell in your region.
• It struggles when it is spread across lots of broad keywords, because each one gets too little data to learn from.
• It needs patience. Give a campaign several weeks before judging it, and change one thing at a time.

Small budgets are welcome. I would rather tell you honestly what a budget can do than have you overspend. See how I run ads.

Mistakes that waste budget

• No tracking. If you cannot see which clicks became enquiries, you are guessing. In Google Analytics you can mark a form submission as a key event and use it to measure what your ads achieve.²
• Targeting too widely. Clicks from people who were never going to buy still cost the same.
• No negative keywords. Terms like "jobs", "free" and "course" can eat spend quickly if you do not exclude them.
• Judging after a few days. Early numbers are noisy.
• Sending everyone to the home page. Send each ad to the page that matches what the person searched for.

Where to start

Start with the working-backwards maths above, write down your numbers, and pick a budget you can sustain for at least three months. If you want a second opinion on the numbers, send me an enquiry and I will tell you where I would start.

References

1. Use Keyword Planner. Google Ads Help. Accessed 5 October 2026.
2. About key events. Google Analytics Help. Accessed 5 October 2026.