How to Determine Google Ads Budget: Simple Guide for Indian Businesses
- Mahesh VR
- Dec 2
- 6 min read
One of the biggest mistakes businesses in India make with Google Ads account is setting the wrong budget.
They either spend too little and get no results, or too much and bleed money without ROI.
The worst part is most don't even realize their budget is the problem until months later when their marketing budget is exhausted.
In this article we’ll see how to determine and set the right budget for businesses that want to run Google Ads in India.
It primarily covers B2B and B2B E-commerce segments, but the principles can apply to almost any industry.
Keep reading.
P.S.
What Happens When You Go Too Low In Ad Spend?
An AI automation agency based out of Coimbatore came to me frustrated with Google Ads.
They were spending ₹10,000 per month, getting barely any clicks, and zero conversions.
Their conclusion? "Google Ads doesn't work for our industry."
I looked at their campaign. The targeting was solid, the ad copy was decent, but the budget was killing them.
My advice was to keep everything exactly the same, but increase the budget to ₹40,000 per month.
Within one month, they were profitable.
Here's why this worked
Google needs data to optimize your campaigns.
At ₹10,000/month, they weren't getting enough clicks or conversions for Google's algorithm to learn and improve.
The increased spend gave Google the data it needed to find the right audience and optimize bids.
This isn't an isolated case.
It's the #1 mistake I see businesses making with Google Ads budgets.
The Two Budget Killers That Destroy Most Campaigns
1. Going Too Low
The minimum budget that actually delivers results is ₹35,000 per month, regardless of industry. I've seen this across multiple campaigns and industries.
Anything less than this and you're not giving Google enough data to work with. You'll get sporadic clicks, no optimization, and ultimately waste your money.
2. Going Blind Without Data
The second biggest mistake is setting budgets without understanding your keywords, competition, and conversion metrics.
You need to know:
What your target keywords cost per click
What your conversion rate should be
How many clicks you need to get meaningful data
What your competitors are spending
How Google Ads Actually Works (The Auction System) & How To Determine Budget For Indian Businesses
Before setting your budget, you need to understand how Google decides who shows up first.
Google Ads works like an auction.
When someone searches, Google runs an instant auction for relevant ads. Your position depends on:
Ad Rank = (Your Maximum CPC Bid) × (Your Quality Score)
This means you can outrank competitors spending more money if you have higher quality scores.
Quality Score depends on:
Ad relevance to the search term
Landing page experience
Click-through rate (CTR)
Ad relevance
The key insight: Higher quality scores = lower costs = better ROI.
Step 1: Define Your Google Ads Goals
Your budget depends entirely on what you want to achieve:
Generate Sales (Highest Budget Required)
This requires bidding on high-intent, commercial keywords. These cost more but convert better.
Budget range: ₹50,000 - ₹2,00,000+ per month
Increase Traffic (Medium Budget)
Focus on broader keywords to build brand awareness and traffic volume.
Budget range: ₹35,000 - ₹75,000 per month
Create Brand Awareness (Lower Budget)
Use display ads and video campaigns to reach a wider audience.
Budget range: ₹25,000 - ₹50,000 per month
Lead Generation (Variable Budget)
Budget depends on your industry and lead value. B2B typically needs more than B2C.
Budget range: ₹40,000 - ₹1,50,000 per month
Step 2: Research Your Keywords and Costs
This is where most businesses go wrong. They pick keywords without understanding the costs.
Use Google Keyword Planner (it's free and accurate, but needs you to set up a Google Ads account and add a billing method):
Enter your main services (e.g., "digital marketing Chennai," "SEO services India")
Check the "Top of page bid" ranges - this shows what you need to bid to appear on page 1
Look at monthly search volumes - higher volume = more competition = higher costs
Analyze competition levels - High competition keywords need bigger budgets
Pro tip: Don't just focus on broad keywords with a lot of traffic. It might sound safe to go where the traffic is, but what you might is are all the Long-tail keywords (3+ words) have 36% higher conversion rates and lower costs, but not enough search volume.
Step 3: Calculate Your Minimum Viable Budget
Here's the formula we use for all our clients:
For Local Businesses / B2B Companies:
Find your average CPC from Keyword Planner
Assume 3-5% click-through rate (conservative estimate)
Assume 2-5% conversion rate (average across most industries)
Calculate clicks needed per month for your target leads
Multiply clicks × CPC = your monthly budget
Example calculation for a B2B service business:
Average CPC: ₹150
Target: 30 leads per month
Conversion rate: 3% (need 1,000 clicks for 30 leads)
Monthly budget: 1,000 × ₹150 = ₹1,50,000
For Ecommerce:
Average CPC: ₹100-200 (depending on products)
Target conversion rate: 1-3% (industry standard)
Average order value: Calculate your breakeven point
Daily budget: Should support at least 10-20 clicks per day
Step 4: Factor in Additional Costs
Your ad spend isn't your total cost. Consider:
Management Costs:
DIY: Free (but your time has value)
Freelancer: ₹15,000-50,000 per month
Agency: ₹50,000-1,00,000+ per month or 10-30% of ad spend
Tools and Software:
Basic: Google's free tools
Advanced: ₹1,000-60,000 per month for PPC management software
Landing Pages and Creative:
Basic: ₹5,000-15,000 per landing page
Professional: ₹20,000-50,000+ per campaign
Step 5: Set Up Campaign Budget Allocation
Don't put all your budget in one campaign. Split it strategically:
For Most Businesses:
70% Search campaigns (high-intent keywords)
20% Display/Remarketing (brand awareness + retargeting)
10% Testing (new keywords, audiences, ad copy)
For Ecommerce:
50% Shopping ads (product-specific)
30% Search campaigns (brand + category keywords)
20% Remarketing (cart abandonment, browse abandonment)
Step 6: Monitor and Adjust (The 2-3 Week Rule)
Never set your budget and forget it. (and don’t cut your ads too early either)
We monitor campaigns for 2-3 weeks. This gives the algorithm enough time to do all the optimisations. Then adjust based on:
Increase budget if:
CTR is above 3%
Conversion rate is meeting targets
You're not spending your full budget
ROI is positive
Decrease budget if:
CTR is below 1%
Conversion rate is poor
Cost per conversion is too high
ROI is negative
Reallocation if:
Some campaigns perform better than others
Certain keywords convert at higher rates
Specific devices or times show better results
Advanced Budget Optimization Strategies
1. Device Targeting
Mobile traffic converts differently than desktop. Analyze your data and allocate budget accordingly.
2. Time of Day Targeting
Run ads during business hours for B2B, evenings/weekends for B2C. This can reduce wasted spend by 20-40%.
3. Location Targeting
Focus on high-performing locations. For Chennai businesses, target specific areas rather than the entire city.
4. Seasonal Adjustments
Most industries have seasonal patterns. Increase budgets during peak seasons, decrease during slow periods.
FAQs
What's the absolute minimum to start?
₹35,000 per month. Anything less won't give Google enough data to optimize.
Should I start small and scale up?
Only if you can afford to waste the initial budget. It's better to start with a viable budget from day 1.
How quickly will I see results?
2-3 weeks to get initial data and for the algo to see what works and what doesn't. This means you can see meaningful results even within a month.
What if my budget is too small?
Two options: increase budget or focus on organic marketing where results take longer but costs are lower.
Tools We Use for Budget Planning
Essential (Free):
Google Keyword Planner: Most accurate cost data
Google Analytics: Conversion tracking
Google Search Console: Organic keyword data
Optional (Paid):
SEMrush: Competitor analysis
Ahrefs: Keyword research
Google Ads Editor: Bulk campaign management
Set Your Google Ads Right With Revenueholic
If you’ve read this far, it means you either scrolled for no reason (which I assume you don’t do usually),
Or you want SOMETHING done with Google Ads (or marketing in general)
If you want to grow your business, and you don’t have an agency or a marketing team with you, you can reach out to us
We’ll help you understand if Google Ads is the right method for your business, calculate the exact campaign strategy and budget you need for your specific business and goals.
Call: +91-8778045446
Email: mahesh@revenueholic.com
Location: Chennai, India
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