Work out whether Google Ads can pay for your service business before you spend anything
Google Ads is the only marketing channel that can produce a phone call this afternoon. It is also the fastest way to spend four thousand dollars and have nothing to show for it.
Which one you get is mostly decided before the campaign launches, by a calculation almost nobody runs.
The only number that matters at the start
Here it is: what share of the leads do you have to close for the ads to break even?
You need three inputs.
- Cost per click in your category, in your city. This is a real number you can look up rather than guess. In GTA service categories it commonly runs between ten and sixty dollars.
- Clicks per lead. How many people who click actually call or fill the form. Five to ten percent is a normal range for a decent service page, so somewhere between ten and twenty clicks per lead.
- Gross profit per job. Not the invoice total. What is left after parts, materials and the labour on that job.
Multiply cost per click by clicks per lead and you have your cost per lead. Divide that by gross profit per job and you have the share of leads you must close to break even.
What it looks like on a real service
Take a repair with a $212 average ticket at roughly 55% gross margin, so about $117 of gross profit per job. Say the cost per click in that category is $12 and it takes 15 clicks to generate a lead. That is $180 per lead.
$180 divided by $117 means you need to close roughly 1.5 leads to cover one lead’s cost, which is impossible. Turn it around: at $117 profit per job and $18 per click-through-to-lead economics, you need to close about four leads in every ten for the campaign to wash its face.
Four in ten on inbound calls from people actively searching for your service is demanding but achievable for a well-run shop with someone answering the phone.
Now run the same maths on a low-margin service in the same business. Same $12 clicks, same 15 clicks per lead, same $180 cost per lead, but $30 of gross profit per job. You now need to close six jobs to cover one lead. There is no close rate that fixes it. That service should not have a campaign, at any budget, ever.
Both of those services sit inside one business, and a single blended campaign buries the difference completely.
Why accounts get judged on the wrong metrics
When the break-even has never been calculated, there is nothing to judge the account against. So it gets judged on what the interface shows most prominently: cost per click, click-through rate, impression share, quality score.
Those are all real metrics and none of them tell you whether money was made. An account can improve every one of them while losing more money each month, simply by getting more efficient at buying clicks for a service that cannot clear break-even.
The other thing that goes wrong
Assuming the arithmetic works, the second failure is tracking. A campaign reporting sixty conversions where forty were fourteen-second calls is reporting fiction. Wrong numbers, hang-ups and people asking for the business next door all land in the conversion column unless you set a call duration threshold.
Before spending, make sure:
- Calls are tracked with a minimum duration that reflects a real enquiry.
- Form submissions are tracked separately from calls, because they close at different rates.
- There is a monthly spend cap set in the account, not just agreed verbally.
- The landing page matches the ad. A winter tire ad landing on a homepage is the most common and most expensive mistake in small accounts.
When the answer is no
If your category has clicks above thirty dollars and a ticket under a hundred, paid search almost certainly cannot work, and no amount of optimisation changes that. The honest recommendation is to spend the money on local SEO instead, where the map pack can deliver the same calls without a cost per click attached.
That is not a smaller sale for an agency to be avoided. It is the answer the numbers give, and finding it out in ten minutes is considerably cheaper than finding it out in four months.
Doing this for your own business
Take your three most common jobs. Write down the average invoice and the gross profit for each. Look up the cost per click for the searches that would produce them. Run the division.
You will usually find one service that clears break-even comfortably, one that is marginal, and one that cannot work. That is your campaign structure, decided before you have opened an ad account.
If you would rather have someone run it with real cost-per-click data for your city, that is part of the free audit, and the Google Ads page covers what management looks like after the maths says yes.