How much should a Toronto business spend on Google Ads?
The honest answer has two parts: there's a floor below which the money is wasted regardless of how good the campaign is, and above that floor the right number comes from arithmetic, not opinion.
There's a floor, and it isn't negotiable
Below about ten Canadian dollars a day, Google Ads stops being a marketing channel and becomes a donation.
The reason is mechanical. The system optimises by watching what happens after each click and adjusting. With a tiny budget it gathers a handful of clicks a week — not enough of a sample to learn anything from. So it keeps guessing, and you keep paying for the guesses.
This is why five dollars a day doesn't produce half the results of ten. It often produces almost none.
The seven-day rule
Whatever you set, leave it alone for seven days.
Every meaningful edit — budget, keywords, bidding — resets the learning period. The most common way small businesses waste money on Google Ads isn't the budget. It's editing the campaign every second day, so it never finishes learning anything.
Set it. Walk away. Look at it next week.
The formula: what a customer is worth to you
Here's the arithmetic that gives you your actual number.
Step one. What does an average customer spend with you in a year? Not one transaction — a year. A restaurant regular, a client on retainer, someone who comes back for a second job.
Step two. Multiply that by 20%. That's roughly what you can afford to spend acquiring one, while leaving room for costs and profit.
Step three. Decide how many new customers you want a month. Multiply.
That's your monthly budget.
Ad account audit, no charge
We look at your Google or Meta account and tell you what is wasting money before you spend another dollar.
Request the auditA worked example
A barber shop in Scarborough. A regular customer comes every six weeks and spends $40, so about $350 a year.
Twenty percent of $350 is $70. That's the most they can afford to pay to win one new regular.
They want ten new regulars a month. Ten times seventy is $700 a month, or roughly $23 a day.
Now the number means something. If the campaign brings in ten regulars at $70 each, it worked. At $120 each, it didn't, and that's a fact rather than a feeling.
What a good cost per lead looks like here
It varies enormously by industry, so treat any single figure with suspicion. What matters more is the relationship between three numbers:
- Cost per click — what you pay for a visit
- Conversion rate — how many of those visits become an enquiry
- Close rate — how many enquiries become customers
If clicks cost $3 and one in twenty becomes an enquiry, each enquiry costs $60. If you close one in three, each customer costs $180. Compare that to the $70 the barber could afford, and you have your answer without needing anyone's benchmark.
The most common problem isn't the click price. It's the second number. A slow website with no visible contact button turns expensive clicks into nothing, which is why we look at the website before we look at the campaign.
When to increase, and when to stop
Increase when the numbers work and you have capacity. If each customer costs $50 and is worth $350, more budget is more profit, up to the point where you can't serve them.
Stop when you've run it properly for a month, the tracking is in place, and the numbers still don't work. Not after five days. Not on a feeling.
And before increasing anything, check the five things in why your ads aren't selling — most of the time the budget isn't the problem.
Frequently asked questions
Can I start with $5 a day?
You can, but below roughly $10 CAD a day the algorithm doesn't gather enough data to learn who converts. You end up paying for a sample too small to teach it anything, which is why small budgets often produce worse results per dollar rather than proportionally fewer.
How long before I know if it's working?
The first seven days are the learning period and shouldn't be judged. Most campaigns become readable at week three or four. Anyone promising results in the first week is describing something other than how the platform works.
Should I pause ads on weekends?
Only if your own data says so. Plenty of businesses assume weekends are dead and turn out to get their cheapest leads then. Run it for a month, look at the numbers by day, then decide.
