Hi there - Happy Sunday! We’ve reached the final post in our ‘paid ad’ series this week.

A huge thank you to Peter for so generously sharing his knowledge and time with us. 🙏 

Next week - y’all are stuck with me again for a bit 😀 

So…how much does this all cost?

In the first three newsletters, I answered the questions of when, how, and what. So the final question is… "Ummm...so how much?" 💰

I often have great conversations with founders about their potential for paid ads. We both agree there’s demand for their product in the form of clear search intent. They have a strong foundation, a well-designed website, polished product messaging, and a well-defined ICP. We even map out the exact strategies we’d use and how we’d execute them for success.

Then, inevitably, the founder asks the budget question in one of two ways:

• "How much money do you need to start with Google Ads?"

• "What’s the minimum amount we could spend to test Google Ads?"

Both are the wrong questions. The real question has far more nuance:

• "How much budget do I need for my specific business, sales process, and bandwidth to make this a meaningful investment?"

There is no universal starting budget for Google Ads, as it entirely depends on your unique situation. Assuming a smaller budget will still yield meaningful results is a mistake.

The goal isn’t just to run ads; the goal is to be successful with them. Cutting corners won’t get you there if success requires a specific budget.

Here are the questions I ask to help founders and marketers determine the right budget using data-driven analysis and strategic thinking about their business.

1) What % of revenue are you able to dedicate to marketing, and more specifically to paid ads?

The answer depends on your business model and profit margins. Below are general benchmarks for total marketing spend, with a portion allocated to paid ads:

• B2B Companies: 5–10% of revenue

  • B2B marketing budgets tend to be smaller due to highly targeted audiences and significant sales costs.

• Technology & SaaS: 15–25% of revenue (sometimes up to 40% for early-stage companies)

  • High-growth businesses often invest heavily in marketing to drive aggressive expansion.

• Consumer Packaged Goods (CPG): 5–10% of revenue

  • Marketing is crucial for brand awareness, but CPG products typically have thin profit margins, limiting the budget allocation.

• Retail & E-commerce: 10–20% of revenue

  • These businesses rely heavily on marketing to capture buyers’ limited attention. Profit margins vary, from razor-thin to substantial, depending on the audience and product quality.

If you're an early-stage startup, you may only have the capacity to focus on one or two marketing initiatives at a time.

Often, founders start with organic social, cold outreach, or content marketing because they require less upfront investment (relatively speaking).

When introduced, paid ads often absorb most of the marketing budget. This is fine, but it’s important to differentiate between total marketing spend and paid ad spend within that category.

2) Will the results be worth the time and effort?

Startups live or die by their ability to focus. Before investing in paid ads, ask yourself this:

• Will this initiative generate enough impact to justify the time and attention it requires?

• Can I commit to it long-term?

Paid ads are not a silver bullet. You can’t "test" them half-heartedly, turn them off, and still expect results.

If I told you that you’d need to dedicate 10–20% of your time to this effort, would the potential revenue increase justify that level of commitment?

For example, if marketing takes up 10–20% of your resources but only increases revenue by 2–5%, it likely wouldn’t be worth the investment. If you need a 20% revenue lift to make it meaningful, you must set your budget accordingly to achieve those results.

Now, let’s ask the final question: how and if can we achieve a meaningful revenue lift?

3) How much money does it take to generate a meaningful level of traffic to my website?

Finally, this last exercise will make this crystal clear for you and help you answer whether you have the proper budget to get the desired outcome.

We need to work backward from your revenue goals:

• How many leads or sales do you need to make this effort meaningful for you?

• What’s your expected conversion rate from lead or website visit to final sale?

• How much traffic do you need to hit those lead or website traffic targets above?

• What is the estimated cost per click (CPC) for your particular keywords?

Once you know these figures, you can estimate the budget required to drive qualified traffic that converts.

Now, let’s put it all together. To make things easier, below is an ROI calculator you can use.

‼️ Note: The calculator above will help you establish your budget for the ads themselves, but you may also need to factor in a budget for a freelancer, agency, or other paid ads specialist to run, manage, and optimize the effort for you (if you don’t have a resource to manage this in house).

If that’s the case, I’d recommend budgeting another $3-8k/month for an external resource or specialist. The cost varies based on the experience level, platform expertise, and scope of work (i.e., are they also handling the creative or design aspects, landing page development and optimization, etc).

Final Thoughts

If I had to summarize the overarching theme of these three budget-related questions, I’d say the main point is to be realistic and practical about your unique situation when determining the budget needed to make Google Ads work.

There is no one-size-fits-all approach for your budget, and the ultimate goal of Google Ads is to drive meaningful sales for your organization.

Thanks for letting me crash this party for a few weeks. Feel free to reach out if you have any questions or would like to learn more about my services. 👋 

Want to learn more about how I help startups increase their revenue by 150-590%? 👀 

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With love and gratitude,