This guide explains how Google Ads works and how to set up a first account for a UK business, in the order I would do it: the numbers to settle first, the account and its billing, tracking, the campaign itself and the first month after launch. It is written for owners who want to run their own ads, and for anyone who wants to understand what is being done with their budget.
If your account is already live and you want a list to check it against, my Google Ads checklist covers every setting line by line. This page explains the reasoning behind those checks.
How Google Ads works, in brief
You choose the searches you want to appear for, write the ads and set a budget. Each time someone searches, Google runs an auction among the advertisers who want that search. Your position depends on your bid and on how relevant and useful Google judges your ad and landing page to be, so the highest bidder does not automatically take the top spot. On Search campaigns you pay when someone clicks, not when the ad is shown.
Search is one of several campaign types. Others show image and video ads on websites, apps and YouTube, or product listings with prices and photos for shops that upload a product feed. Which to start with is covered further down.
Google Ads suits a business when people already search for what it sells, when someone is ready to answer the enquiries, and when the profit on a sale can carry the cost of the clicks that lead to it. It struggles when demand does not exist yet, such as a new kind of product nobody knows to look for. Social ads, which find people by interest rather than by search, usually do that job better.
Settle the numbers before you open an account
The figure that decides everything is the most you can pay for one enquiry and still make money. Start with gross profit, not turnover. An accountancy practice that earns £1,200 of gross profit from a new client in the first year, and wins one client from every five enquiries, can afford up to £240 per enquiry before advertising costs it money. A domestic cleaner who makes £40 profit on a first clean, and books one enquiry in two, can afford no more than £20. The cleaner has far less room for wasted clicks.
Next, check whether your budget can buy enough data to learn from. Look up typical click costs for your sector in my UK Google and Meta ad benchmarks, then work through the sum: the budget divided by the cost per click gives you clicks, and the clicks multiplied by the share of visitors who enquire gives you enquiries. My own rule of thumb is that a first month should be able to produce at least ten enquiries. Fewer than that and you cannot tell a weak campaign from bad luck, so either raise the budget or narrow the first campaign to one service in a smaller area.
Online shops should work out return on ad spend instead: the revenue each pound of advertising needs to bring back. The ROAS and break-even calculator shows the return at which your ads stop losing money, once your margin is in.
Set up the account so the business owns it
- Use a login the business controls. A shared address on your own domain is better than one person’s Gmail. If an agency or freelancer creates the account under their own login, you may not get it back when you part ways.
- Skip the guided campaign. Google’s sign-up steers new advertisers into building a simplified campaign straight away. Look for the option to switch to Expert Mode and create the account without a campaign, so you can set it up properly.
- Pounds sterling and London time. The currency cannot be changed once the account exists. The time zone decides when each day’s budget resets and when any ad schedule starts and stops.
- Give access, do not share passwords. Anyone helping you should request access through their own manager account. You choose their access level and can remove it in seconds.
- Link your other Google accounts. Google Analytics 4 for reporting, Google Business Profile if you want your address and reviews to show with the ads, and Merchant Center if you sell products.
- Complete advertiser verification promptly if Google asks for it. It is a check of your identity or organisation, and ads can stop showing if the deadline passes.
Billing, VAT and the 2% UK fee
Most small businesses pay by card with automatic payments: Google charges you after a set amount of spend or a set period, whichever comes first. Manual payments, where you top up in advance, suit businesses that want spending capped by what they have paid in. Monthly invoicing is available to larger advertisers who meet Google’s requirements. Whichever you choose, add a backup card, because ads stop when the only payment method fails.
On VAT, Google’s taxes help page for the United Kingdom says UK accounts are served by Google Ireland Ltd and that Google does not charge VAT to a billing address in the UK. That does not mean no VAT is due. A VAT-registered business usually accounts for it on its own return under the reverse charge, so ask your accountant how they want the monthly statements recorded. Use the legal name and address on your Companies House record, and add your VAT number to the payments profile, so the documents match your books.
Google also adds a surcharge for ads shown in the UK. Its jurisdiction-specific surcharges page says a 2% UK DST Fee has applied since 1 November 2020, charged on top of your advertising costs and on top of any account budget you set. In practice, £1,000 of clicks on ads shown in the UK becomes £1,020 on the statement. I checked both pages on 4 October 2026. Google does revise them, so read your first statement line by line.
Set up conversion tracking before you launch
A conversion is the action that counts as a result: a sent enquiry form, a phone call, a booking or a purchase. Without conversion tracking you can see which keywords bring clicks but not which bring customers, and Google’s automated bidding has nothing to learn from. I do not launch a campaign until this works.
Track actions that matter to the business. A form that was actually sent counts; a visit to the contact page does not, because most people who land there never get in touch. Calls are worth tracking in two places: calls made straight from the ad, using Google’s forwarding numbers, and calls made after a visit to your website. Shops should send each order’s value, excluding VAT, so the reports reflect the money you keep.
You can install the Google tag directly, through Google Tag Manager, or by importing key events from GA4. Pick one source for each conversion, because the same enquiry recorded by two methods will be counted twice. If your forms collect an email address or phone number, enhanced conversions send a scrambled (hashed) copy of it to Google, which helps match enquiries to ad clicks when cookies are missing.
Consent comes into this too. The Google Ads tag uses advertising cookies, and for visitors in the UK those need consent under PECR, which the ICO enforces. Your site needs a cookie banner that makes declining as easy as accepting, and consent mode should pass each visitor’s choice to Google so its tags behave accordingly. Google’s EU user consent policy covers UK users as well as those in the EU, so this is also a condition of using its advertising features. Once everything is installed, test it end to end with my guide to checking that conversion tracking works.
Choose the first campaign type
For a service business, I start with a Search campaign. It reaches people who have typed what they want, it shows you exactly which searches you paid for, and it gives you control over where the money goes. That control matters most when the budget is small.
Performance Max can work well for an online shop with a clean product feed and conversion tracking that has been running for a while. As a first campaign for a service business, it hides too much: it spreads spend across several networks and shows less detail about where each pound went. Smart campaigns, the simplified type the sign-up offers, are quick to start but give you little say over which searches trigger your ads. Display, Demand Gen and YouTube are better added later, to reach people who already know you or to build awareness once search is working.
Build a Search campaign you can manage
Campaigns
Split campaigns where you would want a separate budget. A firm that offers both conveyancing and family law should run two campaigns, so one cannot swallow the other’s money. Searches for your own business name belong in a campaign of their own as well; they are cheap and convert well, and mixing them in makes everything else look better than it is.
Ad groups and keywords
Inside each campaign, group keywords by what the searcher wants, so the ad and the page can speak to that exact need. “Emergency plumber” and “bathroom fitting” need different ads, even though one plumber offers both. Keyword match types decide how loosely Google can match a keyword to a search. Broad match reaches the widest range of searches and relies heavily on Google’s judgement, so on a small budget I start with phrase and exact match. The keyword match type tool formats a keyword list for each type.
Negative keywords
A negative keyword stops your ad showing for searches that contain it. Add the obvious ones before launch. For most UK service businesses that means words like jobs, salary, course, training, apprenticeship, free and DIY. A private clinic will often add NHS, and a local business may add the names of towns it does not cover.
Location and network settings
Two default settings catch out new advertisers. The first is location targeting: the default option includes people who show interest in your area as well as people who are in it, so a London locksmith can pay for clicks from someone in Leeds reading about London. Switch it to people in or regularly in your locations. The second is the network: new Search campaigns include the Display Network unless you untick it, which sends part of the budget to banner placements on other sites. Turn it off and judge search partners separately once you have data. If nobody answers the phone outside office hours, set an ad schedule to match.
Write ads people choose
Search ads are now responsive search ads. You supply up to 15 headlines of 30 characters and up to four descriptions of 90 characters, and Google combines them for each search. Write every headline so it makes sense on its own and alongside any other. Cover the service and place, a reason to choose you that is true and specific (fixed prices, same-day visits, Gas Safe registered engineers if they are), and a clear next step. Pin a headline to a position only when it must always appear, such as a regulatory statement.
Add assets, which Google used to call extensions: sitelinks to your main service pages, callouts for short facts, your phone number, your address from Google Business Profile, and prices where they help. They make the ad larger and more useful.
Paid search ads in the UK fall under the ASA’s CAP Code, the same rules as other ads. Claims such as “London’s cheapest” need evidence you could show the ASA, and prices quoted to consumers should include VAT. Some sectors face extra Google checks before ads can run, including financial services, which must be FCA-authorised, and gambling, which needs a Gambling Commission licence.
Set the budget and the bidding
Google works from a daily budget. Divide your monthly figure by 30.4 to set it. On busy days Google may spend up to twice the daily amount, but over a calendar month it keeps total spend in line with the daily budget multiplied by the average number of days in a month.
Smart bidding strategies such as Maximise conversions and Target CPA let Google set the bid for each auction, aiming at the outcome you choose. They depend on conversion data, so they are only as good as your tracking. With a new account and tested tracking, I usually start on Maximise conversions, or on Maximise clicks with a cap on the cost per click when the budget is very tight, and move to a target cost per enquiry once conversions arrive steadily. While you are in the settings, switch off auto-applied recommendations, which let Google make changes such as adding keywords without asking you each time.
Send each click to a page that matches the search
The page someone lands on affects both whether they enquire and what you pay, because landing page experience feeds into how Google ranks your ad. Send each ad group to the most specific page you have: the bathroom fitting page for bathroom fitting searches, not the homepage. Repeat the words of the search in the main heading, put the phone number where a thumb can tap it, keep the form short, and make sure the page loads quickly on a phone with a weak signal. My landing page checklist covers the rest before you send paid traffic.
The first month after launch
- Launch day. Check every ad has been approved, send a test enquiry, and confirm it shows as a conversion within a day or so.
- The first two weeks. Read the search terms report every few days. It lists the real searches that triggered your ads, and it is where you will find most of the negative keywords you missed.
- Hold back on big changes. When a bidding strategy is new, Google spends a short period recalibrating. Frequent changes to bids, budgets or targets restart that process.
- Compare with what actually arrived. Match the conversions Google reports against the enquiries in your inbox, phone log or CRM. A big gap usually means a tracking fault, not a campaign problem.
- End of the month. Compare your cost per enquiry with the break-even figure you worked out at the start, then decide what to scale, fix or pause.
Mistakes that cost UK small businesses most
- Leaving the Display Network and the default location option in place on a new Search campaign.
- Counting page views or button clicks as conversions, which teaches the bidding to chase the wrong visitors.
- Running broad match on a small budget with no negative keywords.
- Sending every ad to the homepage.
- Accepting every recommendation Google offers without asking what it does to spend.
- Running ads at times when nobody answers the phone or replies to forms.
- Deciding a campaign has failed after one week and three enquiries.
- Letting an agency own the account, so the history and data leave with them.
Running it yourself or getting help
A small Search account that has been set up carefully can be run in-house with an hour or two a week: reading search terms, adding negatives, checking enquiries against conversions and adjusting budgets. Help is worth paying for when spend is high enough that waste hurts, when tracking involves phone calls, CRM data or several sites, or when results have stalled and you cannot see why. If that is where you are, my Google Ads management service covers setup and ongoing running, and I am happy to look at an existing account and tell you what I would change first.
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