Budget

How Much Does Google Advertising Cost? Calculate Your Own Budget Instead of Trusting Averages

Google advertising costs depend on your own numbers, not industry averages. Work backward: start with the customers you want, divide by your sales and website conversion rates, then multiply the visits you need by your cost per click (CPC). The example below lands at about €1,070 per month.

By Darius Lukosius, Google Ads strategist Published September 5, 2026 Updated September 5, 2026 10 min read

1. What the cost is made of

Most people count only the first part. In reality there are three.

The third part is the one most people skip. A great campaign that leads to a slow, unconvincing page costs exactly as much as a good one - it just returns less. If you are choosing between "double the budget" and "fix the page," the second option almost always wins.

2. The formula: how much you specifically need

You calculate backward from the goal. You need four numbers: you already know two of them, and you can estimate the other two.

1. How many customers you want per month Not inquiries, but actual customers. Start with a number you can physically serve.
2. What share of inquiries turns into customers You know this from your own practice. In service businesses it is often one in three or four serious inquiries. If you do not know, start with a more cautious guess and refine it after the first month.
3. What share of visitors leaves an inquiry This is a website metric. A well-built service website often holds at a few percent, a poor one far below. Check your own analytics, not articles.
4. How much a click costs in your field The only number you cannot know exactly in advance. Estimate it with the keyword planner and stay conservative - reality is often pricier than the forecast.

From there it is simple arithmetic: customers ÷ sales conversion rate = inquiries needed; inquiries ÷ website conversion rate = visits needed; visits × CPC = monthly budget.

3. An example with numbers

Say a window installation company wants 10 new customers per month. From experience, it knows that roughly one in four serious inquiries ends in a signed contract, and about 3% of website visitors leave an inquiry. It estimates the CPC at €0.80.

The last row is the decision point. If the average contract brings in €900 in profit, €107 per customer is excellent. If it brings in €120, the math does not work, and the problem is not Google's prices but the business.

4. What determines cost per click

The price is not fixed in a rate card. It is set by an auction, where the amount you bid is only part of the story.

• Competition and margin. The more a customer is worth, the more someone is willing to pay for a click. Law, finance, insurance, and construction are the priciest.
• Search intent. "How much does window replacement cost" and "window installation in Vilnius" are two different buyers and two different prices.
• Match between ad and page. The more precisely you answer the query, the cheaper it gets. This is the only lever you fully control yourself.
• Landing page quality. Speed, clarity, mobile version - everything affects cost, not just conversion.
• Season and region. The capital is pricier than the countryside; the weeks before holidays are pricier than January.

The practical takeaway: the cheapest way to lower CPC is not to cut bids but to improve the match between the query, the ad, and the page. The second most effective step is to get rid of queries that will never become customers.

5. How much management costs

Three models are common on the market, and each has its own bias.

Whichever you choose, three things must be agreed in writing: who owns the account, who has access to the data, and what stays with you if the relationship ends. An account you do not control is a bigger risk than any fee.

6. When Google advertising does not pay off

An honest answer that agencies usually do not give. There are situations where you are better off keeping the money in your pocket:

• Customer value is too low. If one sale brings €15 in profit and a click costs €0.60, you would need an unrealistically high conversion rate.
• There is no demand. If nobody searches for your product, search ads have nothing to catch. You need channels that create demand.
• Nowhere to send traffic. A website without a clear action turns your budget into visitor statistics.
• You cannot handle the volume. Inquiries answered after three days are wasted money. Ads only speed up your existing process - good or bad.
• The budget is too small for the market. If the calculated minimum is €900 and you have €200, it is better to narrow the audience or region than to spread the budget thin.

7. Where budget most often disappears

1. Queries with no buying intent. Job searches, studying, free alternatives, "how to do it yourself."
2. Inaccurate conversion tracking. The system optimizes for what you measure; if you measure the wrong thing, that is what it will deliver.
3. One page for all campaigns. The homepage is rarely the best answer to a specific query.
4. Running around the clock. If nobody answers at night and inquiries need a fast response, part of the budget is burning air.
5. An unrestricted region. For a service business working in one city, targeting all of Lithuania is a direct loss.
6. Unused reports. The search terms report is the cheapest optimization tool there is, and it is the one most often skipped.

8. Frequently asked questions

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Darius Lukosius

Google Ads strategist who has run search and shopping campaigns in the Lithuanian and Baltic markets since 2016. The numbers in this article are illustrative - the method is built so you can calculate with your own data.