S4 Media

Every contractor who has ever run Google Ads has asked the same question in the same order: how much should I spend, and how do I know if it is working? Usually they ask it after an agency has already spent $2,000 of their money and sent a report full of impressions.

We are S4 — two working builders in Rigby who run a construction company and rebuild the marketing of trade shops across Eastern Idaho. Here is how to set a contractor Google Ads budget in 2026 using math you can do on a napkin, and the honest answer about when the right budget is zero.

Start with the job, not the budget

The wrong question is “what should I spend on Google Ads.” The right one is “what is a customer worth to me, and what am I willing to pay to get one?” Run these four numbers before you open an ad account:

1. Average job value. What does a typical job actually invoice? Not your best job — your median.
2. Gross margin. What is left after materials and labor. If a $6,000 job leaves $1,800, that $1,800 is what you are working with.
3. Close rate on new leads. Be honest. For most trades, somewhere between one in three and one in five cold leads becomes a job.
4. What you will pay per job. A common practitioner rule of thumb is 10–15% of gross margin for customer acquisition. On that $1,800, that is roughly $180–$270 per booked job.

Now the only math that matters. If you will pay $200 per booked job and you close one in four leads, your maximum cost per lead is $50. If Google Ads is producing leads at $35 in your market, you have a machine. At $90, you are losing money on every click and no amount of “optimization” fixes that.

Working backwards to a monthly number

Take that maximum cost per lead and multiply by how many extra jobs you want. Say you want four more jobs a month, you close one in four, so you need sixteen leads at up to $50 each: $800/month. That is your budget — derived, not guessed.

Two things people get wrong here. First, the agency management fee is not part of the ad budget. If you pay someone $500/month to manage and you send $800 to Google, your true cost per lead is $1,300 divided by leads — not $800. Count the whole number. Second, a monthly budget in Google Ads is really a daily budget times about 30.4; Google can spend up to twice the daily amount on a given day and evens it out over the month. Google explains this behavior in the Google Ads help center.

The floor: why tiny budgets fail

The most common contractor Google Ads story goes: spent $300/month for three months, got nothing, decided ads do not work. The problem usually was not the ads. It was that $300 never bought enough clicks to learn anything.

In a market like Idaho Falls or Rexburg, contractor and home-services clicks are not cheap — they are among the more expensive categories in local search. Divide a small budget by a real click cost and you get a handful of clicks a day. At normal conversion rates that is a couple of leads a month, which is far too little signal for Google’s bidding to optimize against and far too little data for you to judge anything.

Practical floor: roughly $750–$1,000/month in actual ad spend, run for at least 90 days. If that number is not available, do not run a smaller version. Put it into the unpaid foundation instead. Half a campaign is not half the results — it is usually zero results plus a bill.

When the right budget is zero

Skip ads entirely, for now, if any of these are true:

• Your Google Business Profile is half-built. A complete profile with weekly photos and steady reviews produces calls at no media cost. Fix that first — always.
• You have no dedicated landing page. Sending paid traffic to a homepage wastes most of it. Every campaign needs a page about that specific service in that specific town.
• You cannot track calls. If you do not know which calls came from ads, you are guessing, and the guess will always be generous.
• You are already booked out. Ads to fill a schedule that is full is just paying to say no to people.
• You are in a slow season for the work you would advertise. Paying to reach people who are not searching is a donation.

That is not anti-ads. It is sequencing. Ads amplify a working system. On a broken one, they amplify the leak.

Where the budget should go once you are spending

For a small contractor, put close to all of it in Search — people actively typing what they need. Skip the Display Network entirely; that is where small contractor budgets quietly disappear into banner impressions nobody asked for.

The split that generally works for a trade shop:

• Your highest-margin service, in your best town. One tight campaign. This is most of the budget.
• Emergency or urgent terms, if your trade has them. Expensive per click, but the intent is immediate and the close rate is high.
• A small brand campaign. Cheap, and it keeps competitors from bidding on your own name in front of your referrals.

Also worth knowing: Local Services Ads are a separate program from standard Google Ads, sit above the regular results, carry the Google Guaranteed badge, and bill per lead rather than per click. For many home-services trades they are the better first paid dollar. The eligibility and screening requirements are documented in Google’s Local Services Ads help center.

The negative keyword list nobody builds

The fastest way to cut a contractor’s wasted spend is a negative keyword list, and most accounts we look at do not have one. Common money-burners to block on day one: jobs, hiring, salary, careers, DIY, how to, free, cheap, courses, training, wholesale, supply, near me for towns you do not serve, and the names of any big-box retailers.

Then check the actual search terms report weekly for the first month. You will find things you never imagined paying for. Every one you add back as a negative makes the remaining budget work harder.

Judging it honestly at 90 days

Ignore impressions. Ignore click-through rate. Ignore “ad strength.” Three numbers decide it:

• Cost per lead — total spend including management fees, divided by real leads. Compare to the ceiling you calculated at the top.
• Cost per booked job — the same number divided by jobs actually sold.
• Return — gross margin from those jobs versus everything you spent.

If cost per booked job is comfortably under your target, increase the budget by roughly 20% and re-check in another month. If it is over after 90 days of genuine effort and a clean negative list, stop. Some markets and some trades just do not pencil on paid search, and the money almost always does better in profile, reviews, and pages that keep working after you stop paying.

One last thing worth being clear about: ads rent attention, and search rankings own it. The month you pause a campaign, the phone stops. The town page you wrote in March is still working in December. Run ads for speed when you need it — build the owned assets underneath either way.

FAQ

How much should a contractor spend on Google Ads per month?
Work backwards from your numbers: maximum cost per lead equals what you will pay per booked job times your close rate. Multiply by the leads you want. For most small contractors in a market like Eastern Idaho that lands around $750–$2,000/month in actual ad spend, excluding management fees.

Is $500 a month enough for Google Ads?
Usually not for contractor keywords. At typical home-services click costs, $500 buys too few clicks to generate enough leads to optimize against or to judge fairly. Below roughly $750/month, the unpaid foundation is a better use of the money.

What is a good cost per lead for a contractor?
It depends entirely on job value. A shop with $200 jobs and a shop with $40,000 jobs have wildly different ceilings. Calculate yours: what you will pay per booked job, multiplied by your close rate on new leads.

Are Local Services Ads better than Google Ads for contractors?
Often, yes, as a first paid channel. LSAs appear above standard ads, carry the Google Guaranteed badge, and charge per lead rather than per click, which makes the math easier to judge. They require a screening and verification process.

Should I run Google Ads or work on SEO first?
Fix the Google Business Profile and build real service and town pages first. Ads stop producing the day you stop paying; those assets keep working. Add ads once the foundation converts — they amplify what is already there.

How long before Google Ads works for a contractor?
Give a properly funded campaign at least 90 days. The first two to four weeks are learning and negative-keyword cleanup, so early cost per lead is usually the worst it will be.

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Not sure whether your money belongs in ads or in the foundation underneath them? That is the first conversation we have with every contractor. Start here →

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