Google Ads remains one of the most powerful customer acquisition channels available to small businesses in 2026. When executed properly, it puts your business in front of people who are actively searching for what you sell, at the exact moment they are ready to buy. When executed poorly, it burns through your budget with nothing to show for it.
The difference between a profitable Google Ads campaign and a money pit is not budget size — it is strategy. We manage Google Ads campaigns for businesses spending anywhere from £1,000 to £50,000 per month, and the principles that drive profitability are the same regardless of scale. This guide covers the strategy framework we use at Prism Digital Group to build campaigns that generate measurable, positive returns for small businesses.
Setting Realistic Budget Expectations
The most common question we hear is 'How much should I spend on Google Ads?' The honest answer is: it depends on your industry, your market, and your goals. But there are some useful benchmarks.
For most local service businesses (plumbers, electricians, solicitors, dentists, accountants), we recommend a minimum monthly ad spend of £1,000 to £1,500 to generate meaningful data and results. Below this level, you simply do not generate enough clicks and conversions to optimise effectively. You are making decisions based on noise rather than signal.
That said, a £1,000 monthly budget can be highly effective if allocated correctly. The key is concentration: rather than spreading your budget thinly across dozens of keywords and locations, focus on your highest-intent keywords in your core service area. Dominance in a narrow market beats mediocrity in a broad one.
Rule of thumb: your monthly ad spend should be roughly 5% to 10% of your monthly revenue target from new customers acquired through ads. If you want £20,000 in new revenue from Google Ads, budget £1,000 to £2,000 in ad spend plus management fees. This typically delivers a 4x to 10x return depending on your average customer value.
Keyword Strategy: Intent Is Everything
The biggest mistake small businesses make with Google Ads is targeting the wrong keywords. Specifically, they target broad, informational keywords rather than high-intent, transactional keywords. 'How to fix a leaking tap' is an informational query — the searcher wants to do it themselves. 'Emergency plumber near me' is a transactional query — the searcher wants to hire someone immediately.
Your campaign should focus on bottom-of-funnel keywords that indicate buying intent. These typically include service-specific terms combined with location modifiers, urgency indicators, or action words.
- Service + location: 'boiler installation Manchester', 'divorce solicitor Toronto', 'dentist near me'
- Service + urgency: 'emergency locksmith', '24 hour plumber', 'same day delivery'
- Service + action: 'hire a roofer', 'book an accountant', 'get a quote for kitchen fitting'
- Service + qualifier: 'best rated electrician', 'affordable web design', 'commercial cleaning company'
Use phrase match and exact match keyword types rather than broad match, especially with smaller budgets. Broad match can generate irrelevant clicks that drain your budget on searches that have no chance of converting. Build a comprehensive negative keyword list from day one, and review your search terms report weekly to add new negatives.
Campaign Structure That Scales
A well-structured campaign is easier to manage, easier to optimise, and produces better results. For a small business, we recommend organising your campaigns by service type, with ad groups that further segment by keyword theme.
For example, a roofing company might have three campaigns: 'Roof Repairs', 'Roof Installations', and 'Emergency Roofing'. Within the 'Roof Repairs' campaign, you might have ad groups for 'Roof Leak Repair', 'Slate Repair', and 'Flat Roof Repair'. Each ad group contains tightly themed keywords and ads that match the specific intent of those keywords.
This structure ensures that your ad copy matches the searcher's query (improving Quality Score and click-through rate), and it allows you to allocate budget to the services that generate the highest return. If emergency roofing delivers a 10x ROAS while general installations deliver 3x, you can shift budget accordingly.
Writing Ads That Convert
Your ad is not the place for clever branding or witty copywriting. It is the place for clarity, relevance, and a compelling reason to click. The best-performing small business ads follow a simple formula: match the searcher's intent in the headline, communicate your unique value, and include a clear call to action.
- Headline 1: Include the primary keyword — 'Emergency Plumber in Manchester'
- Headline 2: Communicate your USP — '24/7 Response | No Call-Out Fee'
- Headline 3: Call to action — 'Call Now for a Free Quote'
- Description: Expand on your offer with specifics — years of experience, number of reviews, guarantee, response time
- Use all available ad extensions: sitelinks, callouts, structured snippets, call extensions, location extensions
Test at least two to three ad variations per ad group. Change one element at a time (headline, description, call to action) and let the data determine which performs best. Google's responsive search ads allow you to provide multiple headlines and descriptions, and the system will test combinations automatically. Provide at least 8 unique headlines and 4 descriptions for maximum testing coverage.
Conversion Tracking: The Non-Negotiable
If you are running Google Ads without conversion tracking, you are flying blind. Full stop. Without tracking, you have no idea which keywords, ads, or campaigns are generating leads and customers — and which are wasting money. Every decision becomes a guess.
At minimum, you need to track form submissions and phone calls. Ideally, you should also track live chat conversations, email link clicks, and if applicable, online purchases. Every conversion should be attributed back to the specific keyword, ad, and campaign that generated it.
Implement Google Ads conversion tracking with enhanced conversions enabled. Set up Google Analytics 4 with linked conversion events. Use call tracking software that assigns unique phone numbers per traffic source so you can attribute phone calls to specific campaigns. At Prism Digital Group, we implement full attribution tracking for every PPC client — because without it, effective optimisation is impossible.
We once audited a Google Ads account spending £4,000 per month with zero conversion tracking. The business owner had no idea which campaigns were working. After implementing tracking and optimising for 60 days, we discovered that 80% of conversions came from just two ad groups. We redirected budget accordingly and tripled their lead volume without increasing spend.
Understanding and Improving ROAS
Return on Ad Spend (ROAS) is the metric that matters most. It measures how much revenue you generate for every pound you spend on advertising. A ROAS of 4x means you generate £4 in revenue for every £1 in ad spend. For most small service businesses, a ROAS of 4x to 8x is a healthy target, though this varies significantly by industry and average customer value.
ROAS is a function of three variables: cost per click (CPC), conversion rate, and average customer value. You can improve ROAS by reducing your CPC (through better Quality Scores and more targeted keywords), improving your conversion rate (through better landing pages and faster follow-up), or increasing your customer lifetime value (through upselling, cross-selling, and retention).
Most small businesses focus exclusively on reducing CPC, but the biggest ROAS improvements typically come from conversion rate optimisation. A well-designed landing page with a clear value proposition, trust signals (reviews, certifications, case studies), and a prominent call to action can double your conversion rate — effectively doubling your ROAS without changing your ad spend.
Common Mistakes That Waste Money
After auditing hundreds of small business Google Ads accounts, we see the same mistakes repeatedly. Avoiding these will save you thousands in wasted spend.
- Sending traffic to your homepage instead of a dedicated landing page — your homepage is not designed to convert ad traffic; build specific landing pages for each campaign
- Using broad match keywords without a robust negative keyword list — this is the fastest way to waste budget on irrelevant searches
- Not tracking conversions — without data, you cannot optimise; this is the single most common and most costly mistake
- Setting and forgetting — Google Ads requires weekly attention; bid adjustments, negative keywords, ad testing, and budget reallocation are ongoing tasks
- Targeting too wide a geographic area with a small budget — better to dominate a 10-mile radius than to appear sporadically across an entire county
- Ignoring mobile — over 60% of Google searches happen on mobile devices; your ads and landing pages must be optimised for mobile users
- Running ads without a fast follow-up process — if a lead fills out your form and waits 4 hours for a response, the ad spend that generated that lead is largely wasted
Getting Professional Help
Managing Google Ads effectively requires time, expertise, and constant attention. For small business owners who are already stretched thin, working with a specialist agency often delivers better results than DIY management — even after accounting for the management fee.
If you are spending more than £1,000 per month on Google Ads without a clear understanding of your ROAS, or if you know your campaigns could perform better but do not have the time to optimise them, consider talking to our paid advertising team. We manage campaigns across Google, Meta, and Microsoft with full attribution tracking, weekly optimisation, and monthly strategy calls. Every pound is tracked from click to customer.