How Much Should a Canadian Online Store Spend on Google Ads?

How much should a Canadian online store spend on Google Ads?

Start with the most you can afford to pay for one sale. Then work out how many sales a fair test needs, and what the clicks to get them will cost. The budget is the result of that arithmetic, and the steps below walk through it in Canadian dollars.

Step 1: Start from gross margin

Gross margin is the share of each sale left after product cost, shipping and payment fees. If you offer free shipping, its cost belongs here too. Gross margin sets two limits.

Break even CPA is the most you can pay in ads for one sale before the order loses money. CPA means cost per acquisition. Break even CPA = average order value x gross margin.

Break even ROAS is the lowest return on ad spend (sales divided by ad spend) that still covers the ads. Break even ROAS = 1 / gross margin.

Step 2: Choose target CPA or target ROAS

Google Ads has two bidding settings built on these limits. Target CPA aims for an average cost per conversion you set. Target ROAS aims for the average conversion value, such as revenue, you want back for each dollar of ad spend.

Target ROAS suits a store whose orders vary in value, since it works with the value of each order. Google's help page says you need to set values for the conversions you track, so every purchase must send its order value to Google Ads.

Google also lists data levels. Its Target ROAS page asks for at least 15 conversions in the past 30 days for Search and Shopping campaigns. Its Target CPA page says you can start with no conversion history, and recommends measuring performance over the last 30 days with at least 30 conversions.

So a new store with few sales can start on target CPA and move to target ROAS once 15 or more valued purchases a month come through.

Step 3: How many clicks does a test need?

A test needs enough sales to tell a working campaign from luck. A practical bar is the one Google gives for evaluating Target CPA: 30 days with at least 30 conversions.

Clicks needed = sales you want / conversion rate. Conversion rate is the share of ad visitors who buy. Take it from your store analytics for paid traffic. With no history, run the math at a low, a middle and a high rate.

Small samples swing hard. With 250 clicks and 5 sales your conversion rate reads 2.0%. One more sale makes it 2.4%, one fewer makes it 1.6%. A week of data at that volume cannot settle much.

What do Google Ads clicks cost in Canada?

Clicks are priced in an auction, search term by search term, so the useful answer is a range for your own terms. CPC, cost per click, is what you pay each time someone clicks your ad.

Keyword Planner, the keyword tool inside Google Ads, reports a top of page bid range. Google describes the low end as roughly the 20th percentile and the high end as roughly the 80th percentile of what advertisers have historically paid for a top of page position, for the location you choose.

On October 15, 2026 we pulled that range for 16 product searches across four online store categories, 15 of which returned a bid, in English for Canada. Keyword Planner returned the bids in Israeli shekels (ILS), the currency of the FreedomPPC Google Ads account that ran the pull. They were converted to Canadian dollars at the Bank of Israel representative rate for October 14, 2026: 1 CAD = 2.1624 ILS.

Furniture is the most expensive category to reach at the top of the page, CAD 6.63 per click at the high end, and clothing and shoes the cheapest at CAD 1.76. All four sit above the CAD 1.20 click in the illustration below, so a real test in these categories needs more room than that example shows.

Step 4: Turn it into a first month budget

Now join the steps. Monthly budget = clicks needed x expected cost per click. A shortcut for the ad cost of one sale: cost per click / conversion rate.

Google Ads works with an average daily budget: its help page divides a monthly budget by 30.4, the average number of days in a month. A campaign can spend up to two times that on a given day, with a monthly limit of 30.4 times the daily budget for most campaigns.

Change one input at a time and the plan moves. At a 3% conversion rate the same CAD 1.20 click gives 1,000 clicks, CAD 1,200 a month and CAD 40 per sale: under break even, still above target. At CAD 0.80 per click and 3%, cost per sale falls to CAD 26.67, inside the target.

Questions Canadian store owners ask about Google Ads budgets

The ROAS formula, the break even rule and ROAS vs ROI and MER, from the start: What Is ROAS? How to Calculate It and What a Good ROAS Is.

To have your margin, tracking and Google Ads account checked, see the Free PPC Audit for Google and Meta.