Google Ads Budget: How to Set the Right Budget in 2026

"What should our Google Ads budget be?" That is the question we hear most often from new clients. And the answer is never a fixed number — it depends on your goal, your industry and your campaign structure. But there are clear rules and principles that make the difference between a budget that generates results and one that simply burns through money.

Need a general overview of what Google Ads costs? Read our complete Google Ads pricing guide for 2026 first. This article focuses specifically on how you set, allocate and scale your budget — whether you spend DKK 5,000 or DKK 500,000 per month.

1. Start with the end goal — not with the budget

The biggest mistake we see is businesses that start with the question: "What can we afford?" instead of: "What do we want to achieve?" Your Google Ads budget should be derived from your goal — not the other way around.

Specifically: what is your target CPA (cost per conversion) or your target ROAS (return on ad spend)? If you do not know the answer, you have a strategy problem, not a budget problem.

Work backwards from your goal:

• How much can you pay per customer? Calculate your average order value, your margin and how much you are willing to invest to acquire that customer.
• What is your conversion rate? If 3% of your visitors convert and a conversion is worth DKK 300 to you, you can pay a maximum of DKK 9 per click (DKK 300 × 3%).
• How many conversions do you want per month? 50 conversions × DKK 300 CPA = DKK 15,000/month in ad spend.

The point is simple: a "good" budget is the budget that delivers a positive ROAS or keeps your CPA below your target. DKK 5,000/month can be too much if you are targeting the wrong audience. DKK 100,000/month can be too little if the return is strong enough to justify more.

2. The minimum budget rule: 10–15× your target CPA

Google Ads' Smart Bidding algorithms (Target CPA, Target ROAS, Maximize Conversions) need data to function. And data requires budget. The rule is simple:

Your daily budget per campaign should be 10–15× your target CPA.

Why? Because the algorithm typically needs 15–30 conversions over 30 days to exit the learning phase. With a budget of 10–15× your CPA, you give the campaign the chance to generate at least one conversion per day — the minimum needed to keep your bidding strategy stable.

"But DKK 60,000 per campaign? We only have DKK 10,000 in total!" — we hear this often. And the answer is important: then run fewer campaigns. One campaign with DKK 10,000 beats ten campaigns with DKK 1,000 each. Always. Too many campaigns with too little budget is the most common mistake we see in Danish Google Ads accounts.

If you have a small budget (under DKK 10,000/month), focus all your spend on a single Search campaign targeting your most profitable keywords. Avoid spreading the budget across Search, Shopping and Display simultaneously — you will end up with no campaign getting enough data to optimise.

3. Budget allocation: Search vs Shopping vs PMax vs Display

If you have budget for multiple campaign types, the next question is: how do you distribute the money? There is no universal formula, but here is the allocation we typically recommend as a starting point:

For e-commerce: Prioritise Shopping and PMax. Read our complete guide to Google Shopping and Performance Max for the detailed setup. A typical e-commerce allocation might be 30% Search + 30% Shopping + 30% PMax + 10% Remarketing.

For service businesses: Prioritise Search. You typically do not have a product feed, so Shopping is not applicable. Allocation: 60–70% Search + 20–30% PMax + 10% Remarketing.

For local businesses: Focus on Search with geographic targeting. Allocation: 70–80% Search (local keywords) + 10–20% PMax + 10% Display/Remarketing.

4. The 3 phases: Test, optimise and scale

Your budget should not be static. It should follow a clear plan with three phases — and your budget optimisation should be adapted to each phase:

The key is patience. Google's algorithm needs 2–4 weeks in the learning phase after every major change. If you change budget, keywords or bidding strategy too frequently, you force the algorithm to restart — and you pay for the extra learning each time.

5. Daily vs monthly budget: How it works

Google Ads is managed on a daily budget — but it is important to understand how Google actually spends your money:

• Google can spend up to 2× your daily budget on a single day if the algorithm identifies especially strong opportunities (for example, more relevant searches than usual that day).
• Monthly spending limit: Over a full month you will never spend more than your daily budget × 30.4 (the average number of days per month). This is Google's guarantee.
• In practice: If you set a daily budget of DKK 500, Google might spend DKK 1,000 on a busy Tuesday and only DKK 200 on a quiet Sunday — but over the month you will spend a maximum of DKK 15,200 (DKK 500 × 30.4).

A practical tip: never evaluate your budget day by day. Always assess performance over a week or a month. Daily fluctuations are normal and expected. If you panic over an expensive Tuesday, you risk making unnecessary changes that disrupt the algorithm's optimisation.

6. When should you increase your Google Ads budget?

More budget is not always better. But there are clear signals that your budget is holding you back:

• Impression Share below 80% (Lost IS: Budget) — You are losing impressions because your budget runs out. Google shows your ad less frequently than it could.
• "Limited by Budget" warning — Google tells you directly in the campaign overview that your budget is limiting your reach.
• Target CPA/ROAS consistently met for 2–4 weeks — Your campaigns are delivering profitably and stably. More budget = more conversions at the same cost.
• Conversion rate is stable or improving — Your landing page converts well. More traffic will generate more sales, not just more costs.
• Search Terms report shows missed opportunities — You can see relevant searches you are not capturing because the budget is exhausted too early in the day.

The scaling rule: Never increase your budget by more than 20% per week. Jumping from DKK 10,000 to DKK 30,000 in one go will destabilise the algorithm's learning and risk your CPA spiking 50–100% for 1–3 weeks while it recalibrates.

A scaling plan might look like this: Week 1: DKK 10,000 → Week 2: DKK 12,000 → Week 3: DKK 14,400 → Week 4: DKK 17,280 → Week 5: DKK 20,736. It takes 5 weeks to double your budget — but you maintain stability throughout.

7. Budget mistakes that cost you money

We audit 5–10 Google Ads accounts per month at Gezar, and the same mistakes come up again and again:

8. Budget calculator: A complete example with Danish figures

Let us take a concrete example and work through the numbers:

Scenario: You run a Danish webshop selling designer furniture. Average order value: DKK 2,500. Margin after cost of goods and shipping: 50%. Target ROAS: 500%.

Step 1: Calculate maximum CPA

Margin per order: DKK 2,500 × 50% = DKK 1,250.
With a ROAS of 500% you can spend a maximum of DKK 2,500 ÷ 5 = DKK 500 per order in ad spend.
(Or think of it as: for every DKK 500 you spend, you need to generate DKK 2,500 in revenue.)

Step 2: Calculate daily minimum budget

Minimum budget rule: DKK 500 × 10 = DKK 5,000/day per campaign.
Ideal: DKK 500 × 15 = DKK 7,500/day per campaign.

Step 3: Determine number of campaigns

With a total budget of DKK 30,000/month (~DKK 987/day) you realistically have budget for 1 campaign.
With DKK 75,000/month (~DKK 2,467/day) you can run 1–2 campaigns.
To run Search + Shopping + PMax simultaneously, you need a minimum of DKK 150,000/month.

Step 4: Choose a starting package

In this scenario we would recommend Gezar's Scale package: DKK 9,000/month in management + ad spend up to DKK 75,000. Start with one Shopping campaign, then add PMax after 2–3 months.