How Much should a Small Business Spend on Google Ads per Month?

For small businesses in Canada, determining a monthly Google Ads budget involves calculating both the direct ad spend (paid to Google) and the management fee (paid to an agency). Most small businesses fall into the following tiers:

• Basic Tier: A monthly ad spend of $1,000 – $2,000 with a flat management fee of $500 – $800. This results in a total monthly investment of approximately $1,500 – $2,800. This is ideal for local service businesses testing paid ads.
• Moderate Tier: A monthly ad spend of $3,000 – $5,000 with a management fee of $800 – $1,500. Total monthly investment ranges from $3,800 – $6,500. This is best for established businesses scaling their campaigns.
• Growth Tier: A monthly ad spend of $6,000 – $10,000 with management fees between $1,500 – $2,500. Total investment is roughly $7,500 – $12,500.

Common Management Fee Structures:

• Flat-Fee Retainer: Usually ranges from $500 to $2,500 per month. This is often recommended for budgets under $3,000/month because it provides cost predictability.
• Percentage of Ad Spend: Agencies typically charge 10% to 20% (sometimes up to 30%) of the total ad budget. This model is more common for businesses with larger, scaling investments over $15,000 per month.

When budgeting, remember that Canadian agencies must collect GST/HST on management fees, and you should always clarify if setup or onboarding fees are extra.