Most answers to this question are some version of “it depends on your goals.” That is true and useless. There is a real floor, and it is set by how the platforms work rather than by anyone’s opinion.
The floor, and where it comes from
Ad platforms need a certain volume of conversions before their targeting can learn anything. Under roughly fifty conversions a week, the system is effectively guessing, and it keeps guessing for as long as you stay under that line.
Work backwards from that and the arithmetic is simple. Budget around seven times your target cost per lead, per day.
- If a lead is worth $5 to you, that is roughly $35 a day, or about $1,000 a month.
- If a lead costs $30, it is closer to $200 a day, or about $6,000 a month.
- If a lead costs $100, common in B2B and legal, you are looking at $700 a day before the platform can optimize properly.
You do not need to know your cost per lead precisely to start. You need a defensible estimate, and if you have never run ads, industry benchmarks for your category are close enough to plan with.
Why underspending is worse than not starting
This is the part that costs people the most money. Running $500 a month against a $50 lead cost does not get you a tenth of the results. It frequently gets you nothing at all, because the campaign never gathers enough data to learn who to show the ads to.
You then conclude that ads do not work for your business, which is the wrong conclusion drawn from a real experiment. Better to run a serious budget on one narrow campaign than a thin budget across four.
A budget too small to learn from is not a small investment. It is a donation.
What sits on top of the budget
Your ad spend goes to Google, Meta or TikTok directly, on your own card. Management is separate, and there are two common models.
A percentage of ad spend is the most common and the worst aligned: it pays the agency more when your costs go up, which is the wrong incentive to put between you and the person managing your account. A flat monthly fee agreed up front does not have that problem. Ours starts at $2,500 a month and never takes a cut of spend.
Before you increase the budget
If you are already running ads and they are not producing, more money will not fix it and will usually make the loss bigger. The most common cause is not the campaign at all. It is the page the click lands on, which is covered in why your Google Ads aren’t converting.
Fix the destination before you increase the traffic. It is cheaper, it is faster, and it is the one change that improves every campaign you run afterwards.