Do Google Ads work for small business? An honest answer

When do Google Ads work for a small business?

Google Ads suit a business when people are already typing what you sell into Google. An emergency plumber, a physio, a family lawyer or a shop with a product people search for by name are typical fits.

They tend to work when:

• People search for your service and want it soon
• One job or sale is worth enough to cover the clicks it took to win it
• You can answer the phone or reply to a form quickly
• You have a page that matches the ad

They tend to struggle when:

• Nobody searches for what you do yet
• Each sale is small and customers rarely come back
• You cannot take on more work right now

So are Google Ads worth it for small business? Sometimes. The honest test is whether paid enquiries turn into paying jobs at a cost you can live with. The rest of this guide shows how to find out without spending much.

How does Google decide who shows and what a click costs?

Every search triggers a quick auction. Google's help page on how the ad auction works says the result depends on more than your bid. It also weighs the quality of your ad and landing page, the context of the search, and the extras on your ad, such as a phone number.

That matters for a small budget. Google says that even if competitors bid higher, you can still win a higher position at a lower price with relevant ads and keywords.

You pay when someone clicks, not when the ad is shown. Google's definition of actual cost-per-click says you often pay less than your maximum bid, because you pay only what is needed to hold your spot. Automated bidding can change that, so read the settings.

What a click costs varies by industry, suburb and season. We will not quote an average here, because it would not be your number. Your own account shows the real figure within days.

What do you need before you spend a dollar?

Three things. Without them, ads mostly buy visits that go nowhere.

• A clear service. One thing, for one kind of customer, in one area. For example, blocked drains in the inner west, not all plumbing everywhere
• A landing page. A page about that one service, with what you do, where you work, proof that is real, and an obvious way to call or enquire. Google's auction also looks at landing page quality, so this page affects what you pay
• A way to count enquiries. Google's conversion measurement can count actions you choose, including purchases, sign-ups, calls from your ads and calls to a phone number on your website

Also decide what an enquiry is worth to you. If one in four enquiries becomes a job, and you know your average job value, you can work out what you can afford to pay for each enquiry.

If the page is the gap, our small business website packages cover that first.

How do you set a daily budget and location targeting?

You set an average daily budget for each campaign. It is an average, not a hard daily cap. Google's page on overdelivery and your average daily budget says a campaign might spend up to twice the daily budget on a given day. Over a month, you will not pay more than 30.4 times your average daily budget.

So work backwards. Decide what you can afford to lose in a month while you learn, then divide by 30.4.

Next, tell Google where your customers are. Its guide to targeting ads to geographic locations lists three options: whole countries, areas within a country such as cities or postcodes, and a radius around a location.

Check one more setting. The location options let you choose between people in your area, or people in or interested in your area. A local trade usually wants the first. Google notes that location targeting relies on signals and is not accurate every time.

Where do small businesses waste money on Google Ads?

Four common leaks are worth checking in any small account.

• Keywords that are too broad. Google's page on keyword matching options says broad match is the default for every keyword. Your ad can then show on related searches you never meant. Phrase match and exact match give you more control and less reach
• No negative keywords. Negative keywords exclude search terms you do not want, such as jobs, free or DIY. Google warns that too many can also cut the customers you reach, so add them from real search terms
• Sending clicks to the homepage. The visitor has to hunt for the service they searched for. Many leave
• No conversion tracking. Without it you see clicks and cost, but not which keywords brought calls

A fifth leak is leaving the account alone. Look at the search terms report weekly at first. It shows what people typed before they clicked.

A worked example: a plumber's first month

This is an example to show the method. It is not a client result and the dollar figure is only for the arithmetic.

A plumber wants more blocked drain jobs in nearby suburbs. She decides she can risk $900 for a one-month test. Using Google's 30.4 rule, that is an average daily budget of about $30. On a busy day the campaign might spend up to $60.

She builds one campaign for one service. Keywords are phrase and exact match around blocked drains. Negative keywords include jobs, course and DIY. Location is a radius around her base, set to people in the area. Ads point to a blocked drains page with a click-to-call button. Calls and form submissions are counted as conversions.

Each week she reads the search terms and adds negatives.

At month end she counts enquiries from ads, then jobs won, then profit on those jobs. She compares that with what she spent. If the sums do not work, she changes one thing or stops. Either answer is useful.

How long should you test before judging?

Long enough to have real data, and no longer.

A few clicks tell you nothing. One good week or one bad week tells you little. Most small businesses need at least several weeks of steady running before the numbers mean much, and longer if jobs take time to close. This is a rule of thumb, not a Google figure.

Judge on these, in order:

• Enquiries from ads, counted properly
• How many became paying work
• Cost per enquiry and cost per job, compared with what a job is worth

Do not judge on clicks, impressions or how often you see your own ad.

Set a stop point before you start. For example: if the test budget is spent and no enquiry has become a job, pause and review the page, the keywords and the offer before spending more.

Some honest limits. Ads stop when the budget stops. Costs can rise when competitors bid harder. And no agency can guarantee leads, including us. If you want help setting up a fair test, see our Google Ads service.

When is SEO or a Google Business Profile the better first step?

Do not start with ads when the basics are missing. Fix these first.

• No Google Business Profile. For a local business this is usually the first step. Google's tips to improve your local ranking say local results are based mainly on relevance, distance and prominence. Google also says there is no way to request or pay for a better local ranking. Complete, accurate details and real reviews are what help
• A weak or slow website. Paying to send people to a poor page costs you twice
• Nobody free to respond. Paid enquiries go cold quickly
• A tight budget and a long view. SEO is slower and has no promised outcome either, but pages you earn rankings for do not charge per click

Ads and SEO are not rivals. Many businesses use ads for speed while search visibility builds. If AI answers are part of your thinking, read AI visibility vs SEO.

Not sure which comes first for you? Get in touch and we will tell you plainly.

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