There is a question almost every small business running Google Ads eventually asks: how much should we actually be spending?
It sounds simple, but it is surprisingly difficult to answer. A plumber spending €1,000 a month on Google Ads can see how many clicks, calls and enquiries that money generates. With good conversion tracking, the business can calculate cost per lead and understand roughly how much revenue comes back. What it usually cannot see is whether competing plumbers in the same market are spending €500, €2,000 or €10,000.
Google is starting to expose a little more of that picture.
A new Spend Benchmarks report appearing in some Google Ads accounts compares an advertiser’s weekly spending and clicks against businesses Google considers similar. Instead of evaluating your advertising entirely in isolation, you can see how your activity compares with a peer group.
For large advertisers with dedicated media teams and expensive competitive-intelligence platforms, this is another useful data point. For a small business trying to decide whether €30 a day is a sensible Google Ads budget, it could be much more valuable.
What Google is actually showing
The new Spend Benchmarks report has been spotted inside the Google Ads Overview. It compares two straightforward metrics: weekly spend and weekly clicks.
In one example reported by Search Engine Land, an advertiser spent €284 during the week while its peer benchmark was €268. The advertiser received 912 clicks compared with 765 for the peer group. Google reportedly determines peers using factors including industry and advertising location.
That last part matters. A dentist advertising in Málaga shouldn’t be compared with a national ecommerce retailer, and a local electrician in Nerja shouldn’t be benchmarked against Amazon. The value comes from comparing businesses competing in broadly similar advertising environments.
Google has not publicly exposed enough detail about the peer methodology to treat the comparison as a precise competitive audit. We don’t know exactly which businesses are included, how tightly industries are grouped or how geographic differences are normalized.
That means the benchmark should be treated as context rather than a target. That context can still be extremely useful.
Consider a local air-conditioning installer
Imagine a small HVAC company operating around Málaga and the Costa del Sol. It spends €1,200 per month on Google Ads and the campaigns generate profitable enquiries, but the owner keeps seeing Search Impression Share sitting lower than expected. During summer, the company struggles to appear consistently for searches such as “air conditioning repair Málaga” or “instalación aire acondicionado.”
The agency managing the account says increasing the budget might help. The owner’s perfectly reasonable response is: are we actually under-spending, or does Google just want more money?
Until now, answering that required inference. You could inspect impression share lost to budget, Auction Insights, CPC trends, conversion rates and campaign profitability. Those metrics remain important, but they don’t directly tell the owner how their overall advertising investment compares with similar advertisers.
Now imagine Spend Benchmarks shows that the company is spending €300 per week while similar advertisers are around €550. That doesn’t mean the owner should immediately increase the budget to €550. It does explain part of the competitive environment.
If the campaign is already generating profitable installations at €300, Google shows that comparable advertisers are deploying substantially more capital, and the account is losing meaningful impression share because of budget, the agency has a much stronger basis for testing whether additional spending can capture more profitable demand.
That is much more useful than simply saying, “Google recommends increasing your budget.”
This could improve one of the worst PPC conversations
Anyone who has managed PPC for small businesses will recognize this conversation. The agency says the campaign could scale. The client asks how much competitors spend. The honest answer is usually that we don’t really know.
There are tools that estimate competitor traffic and keywords. Auction Insights can show which domains overlap with your ads and how often they appear above you. Impression Share tells you how much eligible visibility you’re capturing. None of those gives you a direct view into competitor budgets.
Google isn’t suddenly providing competitor account data either. Spend Benchmarks aggregates advertisers into peer groups, so you won’t see that Competitor A spends €4,300 per month while Competitor B spends €8,700. What you get is a reference point for what similar advertisers are doing.
Even that can make budget discussions much more useful.
Instead of telling a client, “You should probably spend more,” an agency can build a much stronger case: “Your campaign is generating leads at €32 each, your average customer is worth €900, you’re losing 38 percent of available impressions because of budget, and your weekly spend is materially below Google’s benchmark for similar advertisers in this market. Let’s test another €300 this month and see whether marginal cost per lead remains profitable.”
That is a business decision based on several pieces of evidence rather than a generic recommendation to increase advertising spend.
An ecommerce store gets a different benefit
Consider a niche Spanish ecommerce company selling premium cycling accessories. It spends €2,500 per month across Google Shopping and Search. The owner sees a competitor appearing constantly and assumes that company must simply be spending dramatically more.
Spend Benchmarks might reveal something unexpected: the store is already spending around the peer median.
That changes the diagnosis. The problem may be the product feed, Shopping titles, pricing, conversion data, landing pages or campaign structure. The competitor might convert 4 percent of visitors while your store converts 1.8 percent. It may have stronger first-party conversion data feeding Google’s automated bidding systems, or simply have a better offer.
In that situation, increasing the budget could amplify an inefficient campaign rather than solve the problem. The benchmark helps eliminate one hypothesis, which can be just as useful as discovering that you’re under-spending.
For an SMB owner, this is important because PPC problems are often misdiagnosed as budget problems. If Google shows that your spending is already competitive, the next question becomes whether you’re extracting enough value from the traffic you’re already buying.
Agencies can make budget planning more concrete
For small marketing agencies, the report could become particularly useful during monthly or quarterly planning.
Imagine managing paid search for a regional law firm. The client currently spends €4,000 per month and wants to grow enquiries by 30 percent. The agency can look at current CPA, conversion rate, Search Impression Share, lost impression share due to budget, auction competition, historical marginal returns and now peer spending.
Suppose the campaign has a strong CPA, converts leads into profitable clients and is losing substantial impression share because of budget while peer spend is significantly higher. That supports a scaling test.
If the campaign is already spending well above the peer benchmark and CPA has deteriorated, the answer may be completely different. The agency might focus on conversion rate, keyword quality, geographic targeting, landing pages or lead qualification before adding another euro.
This is how the benchmark should be used: as another piece of evidence inside a broader business decision.
Peer spend is not a recommended budget
This distinction is essential because Google has an obvious commercial incentive. Google makes more money when advertisers spend more.
If Google tells you similar businesses spend €800 per week and you’re spending €400, it is very easy to interpret that as a recommendation to spend €800. That isn’t what the data proves.
Your competitors don’t necessarily know what they’re doing. A competitor can spend €10,000 per month inefficiently. They may have completely different margins. They may accept a €150 cost per lead because their average customer is worth €15,000 while your average customer is worth €1,500. They may have a dedicated sales team converting 40 percent of enquiries while your business converts 15 percent. They might simply be wasting money.
Matching their spend blindly would reproduce their budget, not their economics.
For an SMB, the correct budget remains the amount that produces acceptable incremental returns. The peer benchmark simply gives you more information about the environment in which you’re trying to achieve those returns.
The real question is marginal profitability
Suppose you spend €1,000 and generate 40 leads at €25 each. Increasing the budget to €2,000 does not guarantee another 40 leads at the same cost.
Your first €1,000 might capture the easiest searches, strongest locations and highest-intent users. The next €1,000 may require Google to enter more expensive auctions or expand into weaker opportunities. Cost per lead could rise from €25 to €32, €40 or considerably more.
The useful question is therefore not simply how much your competitors spend. It is whether your business can profitably spend more.
Spend Benchmarks helps provide context for answering that question. If you’re spending far below comparable advertisers, losing impressions to budget and maintaining excellent unit economics, there may be obvious room to test higher spend. If you’re already above the benchmark and struggling with profitability, throwing more money into the account is unlikely to solve the underlying problem.
A solopreneur can use this without becoming a PPC expert
This feature could be especially valuable for owners managing relatively simple campaigns themselves.
Imagine a freelance immigration lawyer spending €20 per day. The campaign produces a few consultations every month and the lawyer isn’t sure whether increasing the budget makes sense. A benchmark showing similar advertisers spending substantially more gives them a reason to investigate.
They can start with three basic questions. How much does a new client typically generate? How much does it currently cost to acquire one? Are profitable campaigns being limited by budget?
If a client is worth €1,200, acquisition costs €120 and the campaign regularly exhausts its budget, testing €30 or €40 per day may be completely rational. If acquisition already costs €700, discovering that competitors spend more doesn’t fix the economics.
The benchmark makes the question easier to ask. The business numbers still provide the answer.
The click benchmark may be just as useful as spend
The click comparison adds another useful dimension.
In the example reported from the interface, the advertiser spent €284 compared with €268 for peers while generating 912 clicks against a benchmark of 765. That means the advertiser isn’t simply spending more. It is receiving considerably more traffic for a relatively small increase in spending.
That could indicate cheaper clicks, better ad relevance, a different campaign mix or participation in less expensive auctions. The next step is to combine that information with conversion data.
If those additional clicks convert efficiently, the advertiser may have a genuine competitive advantage. If they don’t convert, the account may simply be buying cheaper but lower-quality traffic.
Again, the benchmark creates a useful question. It doesn’t automatically provide the answer.
Combine it with Auction Insights and Impression Share
Google Ads already provides competitive information through Auction Insights. You can see which advertisers participate in the same auctions, how often their ads appear, how often they rank above you and how much impression overlap exists.
Spend Benchmarks adds another layer.
Auction Insights might tell you that Competitor A appears above you frequently, while Spend Benchmarks simultaneously shows that your overall spending is well below the peer group. If your campaign is also profitable and losing impression share because of budget, increasing spend becomes a reasonable experiment.
Now imagine the opposite. You’re spending above the peer benchmark but competitors still appear above you frequently. That points toward a different set of questions around bids, ad quality, targeting, landing-page experience, campaign structure or Google’s assessment of expected performance.
For agencies, combining these signals should make competitive analysis more grounded and budget recommendations easier to explain to clients.
Turn the benchmark into a test, not a target
The practical workflow for an SMB is fairly simple.
Check the benchmark and compare it with your current spend. Then look at profitability, conversion volume, impression share and lost impression share due to budget. If the campaign is profitable, budget constrained and below the peer benchmark, increase spend gradually.
Don’t jump from €1,000 to €3,000 because the benchmark says competitors spend more. Move to €1,200 or €1,300, then watch marginal CPA or ROAS. If performance remains healthy, scale again. If efficiency deteriorates rapidly, stop and investigate why.
This turns the benchmark into useful experimental information rather than an instruction from the company selling you advertising.
Better context matters as Google Ads becomes more automated
Google Ads has become increasingly automated over the last several years. Bidding is automated, targeting is increasingly automated, creative can be generated or assembled automatically, and campaign types such as Performance Max deliberately move more decision-making into Google’s systems.
That makes good contextual information more valuable.
If advertisers are expected to trust automated systems with more decisions, they need better information for evaluating whether the overall outcome makes business sense. Spend Benchmarks provides one additional piece of that context.
It doesn’t tell you whether your ads are profitable, whether competitors have better campaigns or whether you should copy their budgets. What it can tell you is whether your advertising investment looks unusually small or large relative to businesses Google considers similar.
For an SMB owner who has spent years asking whether competitors are simply spending more, that is genuinely useful information. It makes the conversation about PPC budgets a little less speculative and gives agencies another data point for explaining when scaling deserves a test and when the problem probably lies elsewhere.
The goal isn’t to spend what your competitors spend. It is to understand the competitive environment well enough to find out how much your own business can profitably spend.