How to set your Google Ads budget for next year

If you manage your own advertising accounts, you know that setting the right Google Ads budget is one of the most important decisions for ensuring good results next year.

And if your investment has already yielded good results this year, the basic rule is simple – you should increase your Google Ads budget to keep growing.

A good rule of thumb is to consider an increase of around 20%. However, before committing to any amount, there are three essential steps you should take to make the best possible decision. Let’s have a look at them.

1. Analyse last year’s results

Review what actually happened in the previous 12 months:

– Impressions – if the goal was to increase awareness (e.g., product launch);
– Clicks or traffic – if you wanted more visits to your website;
– Forms or contacts – if you wanted more leads or enquiries;
– Sales – for those who sell products or have e-commerce.

Compare how much you spent and what the results were, to see if this year’s investment was adequate, insufficient or too high.

2. Adjust your budget (if necessary) according to seasonality

Businesses linked to tourism and hospitality in coastal areas, such as the Algarve, have very busy periods and quieter times. Having the same budget for every month may not make sense. What you should do:

– Analyse the last 12 months of data, identify peaks and declines in demand;
– Pay special attention to periods such as Christmas, Easter, summer, public holidays and/ or long weekends;
– If you don’t have enough data in Google Ads, use your sales, booking and contact history from previous years to identify clear patterns.

3. Apply the recommended increase

Once you understand the annual trend and whether there is seasonality that justifies changes to the budget, and after analysing the results generated by Google Ads, set the budget for next year as the previous year’s budget plus 20%.

This margin works because the cost per click (CPC) usually rises every year and competition increases. If you have another amount available, use it, but normally to grow you need to invest, assuming that your Google Ads account has a good score and applies all the best practices.

After completing these three steps, it is time to put everything into numbers and create your plan. Here are two examples of budget plans for Google Ads:

a) Budget planned based on annual events and leads:

b) Budget planned based on amount spent (same increase for every month):

The two tables above show common budgeting examples, however:

– The first prioritises months with a historically higher number of leads;
– The second increases all months by 20% without considering leads, which is not appropriate for months with high potential, such as August, that require a larger budget.

In both cases, regular months, or months without change, are added to the monthly budget, respecting the yearly total defined.

Recap of the total annual budget

Now, just add up the monthly amounts to get the previous year’s annual total, and add 20% to it. For example:

– Total 2025 → € 6,000;
– Recommended budget 2026 → € 7,200.

Simple, straightforward and realistic. And finally, we have one last tip!

Google Ads’ golden rule

If you don’t need to change your monthly budget, all the better. Google favours campaigns with stable and consistent investment flows. This is the simplest way to grow and minimises the need for the algorithm to have to relearn with frequent budget changes.

If you have a seasonal business (tourism, boating, outdoor activities, etc, and it is really necessary, make occasional adjustments, but only if they are essential, for, as we’ve said before, the algorithm favours stable and consistent campaigns.

And if you feel that you are having difficulties managing this on your own or have questions on how to optimise your online advertising, we can help you set your Google Ads budget for the next year, or analyse your account to explain how, where and when to apply it, without complications and in a way that guarantees you the best results.