Why Benchmarks Lead You Astray
Every agency deck has a slide of "industry benchmarks" for cost per click and cost per lead. They are averages of other people's accounts, in other cities, with other websites and other sales teams. Your Google Ads budget in San Antonio should be built from your numbers, not theirs.
The good news: the math is short.
Work Backward From Revenue
Start with what you want, not with what you can stomach spending.
- Revenue goal. How much new revenue per month do you want from ads?
- Average job value. What is a typical customer worth? If you sell maintenance plans, include repeat business.
- Customers needed. Divide the goal by the job value.
- Close rate. Of the leads you get, what share become paying customers? Divide customers needed by close rate to get leads needed.
- Conversion rate. Of the visitors who click your ad, what share call or fill out a form? Divide leads needed by conversion rate to get clicks needed.
- Cost per click. Google's Keyword Planner shows estimated bid ranges for your actual keywords in your area. Multiply clicks needed by that cost.
That final number is your starting budget. Our PPC budget calculator does the arithmetic for you.
Know Your Break-Even Before You Spend
Return on ad spend, or ROAS, is revenue from ads divided by the cost of the ads. Your break-even ROAS depends on your gross margin. A business with thin margins needs a higher return just to stay even. Work this number out first, so you know which campaigns are making money and which are making the agency look busy. The ROAS calculator will find it for you.
Two Levers That Matter More Than Bids
- Conversion rate. If your landing page turns twice as many visitors into calls, every lead costs half as much, with no change to your bids. This is the cheapest improvement in paid search, and it starts with one landing page per ad group.
- Close rate. Answer the phone fast, follow up the same day, and quote clearly. A lead that goes unanswered costs the same as one that closes.
Stop Paying for Searches That Will Never Buy
Open your search terms report and read what people actually typed. You will find job seekers, do-it-yourselfers, people looking for a supplier, and searchers in cities you do not serve. Add them as negative keywords. Repeat every week at first, then every month.
Track Calls, Not Just Clicks
For most service businesses, the phone is the main conversion. Call tracking shows which campaign and keyword produced each call. Without it, you are budgeting by feel. Our call tracking guide shows how to set it up without muddying your Google listing. Google's Local Services Ads, which charge per lead and show a Google screening badge for eligible businesses, are also worth testing in many home service and legal categories. We compare the two in Local Services Ads vs. Google Ads.
Frequently Asked Questions
How much should I spend on Google Ads in San Antonio?
Spend what your own numbers say you need to hit your revenue goal, not a figure borrowed from a benchmark. Work backward from job value, close rate, website conversion rate, and the cost per click Google estimates for your keywords. Start there, measure real results, then adjust.
What is a good ROAS for a service business?
A good ROAS is any return comfortably above your break-even point, which depends on your gross margin. A high-margin service can profit at a lower ROAS than a low-margin one. Calculate your break-even first, then judge every campaign against it.
Why are my Google Ads leads so expensive?
The usual causes are broad keywords that attract the wrong searchers, a landing page that converts poorly, and missing negative keywords. Competitive trades also have higher click costs. Improving your conversion rate and pruning wasted searches lowers cost per lead without raising bids.
Should I try Google Local Services Ads?
Many home service and legal businesses should test them. Local Services Ads charge per lead rather than per click and appear at the top of many local searches. Eligibility depends on your category and passing Google's screening, and results vary by market, so track them alongside regular ads.
Want a budget built on your numbers instead of a slide deck? We will review your account or build a starting plan from scratch, free, and you keep it whether or not you hire us. Get your free plan or call (210) 346-0848.
Filed under
- PPC
- Google Ads
- ROAS
- Benchmarks
- Budget
