23 September 2026 · 6 min read · Oscar Markham
How much should a small business actually spend on ads?
Most advice on advertising budgets is a percentage of turnover, which is useless if you do not already know whether your advertising works. A better method starts from the other end: what a job is worth, how many you need, and what you can afford to pay to win one.
Work backwards from a job
Take your average job value and your gross margin. If a job is worth €3,000 and your margin is 40%, the job contributes €1,200. If you are willing to spend a quarter of that to win it, you can afford €300 to acquire a customer.
Then work out how many enquiries it takes you to win one job. If it is four, you can afford €75 a lead. That number, not a percentage of turnover, is your actual budget constraint.
Then decide how many jobs you want
If you want six more jobs a month and you can afford €300 per job, your budget is €1,800 plus management. That is a real number derived from your own economics rather than an industry rule of thumb.
If that figure is more than you can spend, the answer is usually not to spend less. It is to improve the conversion rate so each job costs less to win.
- Average job value x gross margin = contribution per job
- Decide what share of that you will spend to win one
- Divide by your enquiry-to-job conversion rate
- That is your affordable cost per lead
- Multiply by the number of jobs you want
The floor nobody mentions
Below about €500 a month in ad spend, most campaigns cannot gather enough data to improve. The platforms need a certain volume of conversions before their optimisation does anything useful.
Spending €200 a month across two channels is generally worse than spending nothing, because it costs money and teaches you nothing.
The ceiling nobody mentions either
Every market has a point where more budget stops buying more customers and simply buys the same customers more often. In a small county that ceiling arrives quickly.
When cost per lead climbs steadily as you increase budget, you have found it. The answer then is a new channel, a wider area, or a better conversion rate — not more money into the same campaign.
What to do in month one
Set the budget from the arithmetic above, run it for a full month without changing it, and judge it on enquiries and jobs rather than on clicks.
Changing budget or targeting every few days is the most common reason a campaign never settles. It needs a month to be worth reading.
Written by Oscar Markham, founder of Dublin Growth Digital. We run lead generation for Irish estate agents and trades, reported every Friday in enquiries and booked work.