Freedom PPC
How Much Should an Ecommerce Brand Spend on Google Ads in Canada?
There is no fixed dollar figure. Work backward from your margin and target cost per sale, then make sure the daily budget is high enough to reach roughly 15 to 30 conversions per month, the volume Smart Bidding needs to learn. Budget is an output of your unit economics, not a number you pick out of the air.
"How much should I spend on Google Ads?" is the wrong first question. The right one is: how much can you pay to acquire a customer and still make money? Answer that, and the budget sizes itself. Here is the framework.
1. Start from margin and target CPA
Take your average order value and gross margin. Decide the most you can pay for one sale while staying profitable, that is your target cost per acquisition (CPA). If you make 40 CAD margin on an average order and you are willing to reinvest half of it to acquire a customer, your target CPA is around 20 CAD.
2. Give the algorithm enough data to learn
Smart Bidding needs volume. A campaign that gets only a handful of conversions a month stays stuck in the learning phase and performs erratically. Aim for a daily budget that can produce at least 15 to 30 conversions per month at your expected cost per conversion. Below that threshold, no amount of tweaking stabilizes it.
3. Size the daily budget from those two numbers
If your target CPA is 20 CAD and you want 30 conversions a month, that is roughly 600 CAD in monthly media, before accounting for the reality that early spend is less efficient while the account gathers data. Plan for a ramp: the first weeks cost more per conversion, then Smart Bidding tightens.
4. Separate brand from prospecting before judging cost
Branded search is cheap and converts easily, so if it is mixed into the same campaign as cold prospecting, it hides the true cost of acquiring a new customer. Keep them apart so the budget decision is based on real prospecting economics, not inflated blended numbers.
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How much should an ecommerce brand spend on Google Ads in Canada?
No fixed figure. Set it from your target CPA and margin, and make sure the budget can reach 15 to 30 conversions per month so Smart Bidding can learn.
What is a good starting budget?
Enough to reach roughly 15 to 30 conversions per month at your expected cost per conversion. Below that the campaign stays stuck in the learning phase.
Why does brand traffic distort the budget?
Branded search is cheap and converts easily, so mixing it with prospecting hides the true cost of a new customer and leads to over-optimistic budgeting.