It's one of the most common questions I get from small business owners considering Google Ads, and the honest answer is: it depends.

But stick with me, because there's a much more useful question to be asking, and by the end of this post you'll know exactly how to answer it for your own business.

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First, how does Google Ads actually charge you?

Google Ads is a pay-per-click (PPC) advertising platform, which means you only pay when someone actually clicks on your ad. Not when it shows up, not when someone sees it and scrolls past, only when they click. That's actually one of the things that makes it a pretty efficient form of advertising compared to, say, a billboard or a print ad where you're paying regardless of whether anyone notices.

The amount you pay per click isn't fixed though. Every time someone types a search into Google, an auction happens in a split second. Every advertiser who's targeting that search competes for the available ad spots, and what you pay depends on how many other businesses are bidding on the same keywords and how relevant Google considers your ad to be.

That second part is worth knowing if you're a smaller business: Google doesn't just hand the top spot to whoever's willing to pay the most. A well-written, relevant ad pointing to a useful landing page can outperform a bigger budget with a lazy one. You don't need to outspend your competitors, you need to out-relevance them.

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So what does a click actually cost?

It varies a lot by industry, because competition varies a lot by industry. As a rough guide, here's what businesses in Australia are typically paying per click on Google Search:

• Trades and home services: $6–$14
• Medical and dental: $4.50–$11
• Legal: $12–$23
• Real estate: $2.30–$6.20
• Ecommerce: $1.20–$4

These figures are based on 2024 benchmark data from WordStream, LocaliQ and Search Engine Journal, converted to AUD. Your actual costs will vary depending on your location, your specific keywords, and how well your ads and landing pages are put together.

As a rough rule of thumb, Google Ads needs at least 10 clicks per day to learn and optimise properly. Below that, the system doesn't have enough data to spot patterns or improve. So when you're working out your budget, it's worth checking what 10 clicks a day would actually cost in your industry using the ranges above.

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The thing is, click cost isn't really the right question

Clicks don't pay the bills. Customers do.

A $12 click in a competitive industry might be completely worth it. A $3 click might be a waste of money. It all comes down to whether the economics of Google Ads actually work for your specific business.

Here's a simple example. Say you're a service business spending $2,000 a month on Google Ads with an average cost per click of $5. That gets you around 400 clicks. If 8% of those become leads, that's 32 enquiries --at a cost of roughly $62.50 per lead. If 30% of those leads become paying customers, that's roughly 10 new customers. And if each customer is worth $3,000 to your business, that's $30,000 back on $2,000 spent.

Worth it? Clearly yes.

But if each customer is worth $150? The same spend tells a very different story.

This is why knowing your numbers before you start is everything. Without them, you have no way of knowing whether a $62 lead is a win or a loss, or how to manage your campaigns when things aren't performing.

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What to do with your numbers

Once you've run the maths, you'll land on a target Cost Per Lead: the maximum you can afford to pay per enquiry and still be profitable. This becomes your benchmark inside Google Ads. Under it, things are working. Above it, you know where to focus.

If the maths feels a bit overwhelming, that's completely normal, most people haven't had to think about their business numbers this way before. That's exactly why I built the Google Ads Goal & Profitability Calculator, which you can access below for free.

Plug in your own figures and it'll tell you whether Google Ads is likely to be viable for your business, and give you a target Cost Per Lead to work toward before you spend a cent.

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If you want to go deeper on this, my Google Ads Setup System  walks you through not just the CPA calculator and how to set goals using your own business numbers, but also how to build a Google Ads account that's set up for success from day one. It's built for service providers who want to try out Google Ads, but who can't quite justify agency pricing yet. I want to help you avoid the costly DIY mistakes that benefit no one (but Google).

You can preview the program for free here, or get full access now at the launch price, saving $250!