Google Ads B2B: How Much To Spend in London?

One of the most common questions I get from London founders is, "how much should we spend on Google Ads?". And my answer is always the same: it's the wrong question. Asking about a budget before you understand your numbers is like asking a builder how much a house costs before you've decided if you want a bungalow or a skyscraper. You're starting at the end.

The real question isn't "How low can my CPL go?" but "How high a CPL can I afford to acquire a truly great customer?". The answer to that question will define your entire growth strategy, especially in a hyper-competitive market like London where ad costs can be brutal. If you're a SaaS startup near the Old Street Roundabout or a FinTech firm in Canary Wharf, you're competing with businesses that have deep pockets and understand their unit economics inside out. To compete, you have to do the same.

This guide will walk you through the exact process we use to help B2B companies figure this out. We're going to build your budget from the ground up, based on maths, not guesswork. Forget what you've heard about "industry benchmarks". Let's talk about your buisness.

Your ICP is a Nightmare, Not a Demographic

Before we even touch a calculator, we need to get something straight. Most B2B targeting is lazy and ineffective. "Companies in the finance sector with 50-200 employees" tells you nothing of value. It leads to generic ads that speak to no one and get ignored. To stop burning cash on Google Ads, you must define your customer not by who they are, but by their pain.

You need to become an expert in their specific, urgent, expensive, career-threatening nightmare. Your Head of Sales client isn't just a job title; he's a leader staring at a flatlining sales chart, terrified of missing his quarterly target and getting fired. For a legal tech SaaS, the nightmare isn't 'needing document management'; it's 'a partner missing a critical filing deadline and exposing the firm to a malpractice suit.' Your Ideal Customer Profile (ICP) isn't a person; it's a problem state.

Once you've isolated that nightmare, you can find out what they type into Google at 10 PM when they can't sleep. They're not searching for "B2B solutions". They're searching for "how to fix sales pipeline" or "malpractice risk mitigation software". These are the high-intent keywords that cost a fortune but are worth every penny if you can solve that specific pain. This work is the foundation. Without it, you have no business spending a single pound on ads, and no amount of budget will save a campaign targeting the wrong problem. It's a critical part of a solid UK B2B paid ads strategy that many overlook.

How to Calculate Your Customer Lifetime Value (LTV)

Right, now for the numbers. The single most important metric for any B2B business is its Customer Lifetime Value (LTV). This figure tells you what a customer is worth to you in gross margin over the entire time they stay with you. It is the ceiling for your customer acquisition cost. Once you know this, you can make intelligent decisions about how much you can afford to spend to get a new customer.

Here's the simple formula:

LTV = (Average Revenue Per Account Per Month * Gross Margin %) / Monthly Customer Churn Rate %

Let's break it down:

• Average Revenue Per Account (ARPA): What do you make per customer, per month? Simple enough.
• Gross Margin %: What's your profit margin on that revenue after accounting for the cost of servicing that customer (e.g., support, server costs)? Let's say it's 80%.
• Monthly Churn Rate: What percentage of customers do you lose each month? If you lose 2 out of 100 customers a month, your churn is 2%.

Use the calculator below to figure out your own LTV. Play around with the numbers to see how small changes in churn or margin can drastically change what a customer is worth.

In the example above, a single customer is worth £10,000 in gross margin. Now you have the truth. This number frees you from the tyranny of cheap leads and lets you build a predictable growth engine.

So, What's a Realistic B2B Lead Cost in London?

Now that you know your LTV, you can work backwards to figure out what you can afford to pay for a lead. A healthy, sustainable business model typically aims for a 3:1 LTV to Customer Acquisition Cost (CAC) ratio. This means for every £3 of LTV, you can spend £1 acquiring that customer.

So, if your LTV is £10,000, your target CAC is around £3,333.

But CAC isn't the same as Cost Per Lead (CPL). Your CAC is the total cost to get a paying customer, which includes your sales and marketing costs. The next step is to figure out your lead-to-customer conversion rate.

Target CPL = Target CAC * Lead-to-Customer Conversion Rate %

If you know that your sales team converts 1 in 10 qualified leads into a paying customer (a 10% conversion rate), then your maximum affordable CPL is £333 (£3,333 * 0.10). Suddenly that £250 lead from a high-intent Google search doesn't seem so expensive, does it? It looks like a bargain. This is the maths that unlocks aggressive, intelligent growth.

Of course, this varies massively by industry. The B2B compeition in London is fierce. Here are some very rough CPL ranges you might see from Google Ads, based on our experience running campaigns for UK businesses.

As you can see, it's not cheap. That's why understanding your maximum affordable CPL is so important. It tells you if you can even afford to play in this sandbox. Many founders come to us wanting to get more SaaS trials, but they haven't done this maths first, which is a foundational part of our London founder's guide to getting SaaS trials from Google Ads.

How Do I Set a Test Budget That Actually Buys Data?

So how much should you actually put into Google Ads to start? Forget starting with £10 a day. For B2B in London, that's like trying to put out a house fire with a water pistol. You won't get enough data to make any meaningful decisions, and you'll conclude "Google Ads doesn't work" when in reality, you just didn't invest enough to find out.

You need to set a "data acquisition budget". The goal of your first 2-3 months is not ROI. It's to gather data and answer critical questions:

• -> Which keywords actually drive qualified leads?
• -> What is my real-world Click-Through Rate (CTR) and Cost Per Click (CPC)?
• -> What is my landing page conversion rate?
• -> What is my actual, real-world Cost Per Lead (CPL)?

To get these answers, you need enough clicks and conversions to be statistically significant. I'd recommend a minimum starting budget of £1,500 to £3,000 per month. If your target CPL is £150, a £1,500 budget only gives you enough room to get 10 leads. That's barely enough to get a signal. A £3,000 budget aiming for 20 leads is much better. This approach is central to any good performance marketing strategy for London founders.

Why Your "Request a Demo" Button is Killing Your Budget

Now we arrive at the most common failure point in all of B2B advertising: the offer. The "Request a Demo" button is perhaps the most arrogant Call to Action ever conceived. It presumes your prospect, a busy C-level decision maker in London, has nothing better to do than book a meeting to be sold to. It is high-friction, low-value, and instantly positions you as just another vendor.

A weak offer kills your landing page conversion rate. If only 1% of your traffic converts, your CPL will be sky-high. If you can get that to 3% or 5% with a better offer, you've effectively halved your CPL without spending a penny more on ads. Your budget suddenly goes twice as far.

Your offer’s only job is to deliver a moment of undeniable value—an "aha!" moment that makes the prospect sell themselves on your solution. So what's better?

• For SaaS: The gold standard is a free trial (no card details) or a freemium plan. Let them use the actual product. Let them feel the transformation. I've seen many clients struggle to generate leads until they switched their offer to be more compelling. The right strategy can make a huge difference in finding UK leads for B2B SaaS with Google Ads.
• For Agencies/Consultants: You must bottle your expertise into a tool or asset that provides instant value. For us, it's a 20-minute strategy session where we audit failing ad campaigns for free. For a marketing agency, it could be a free SEO audit. For a data analytics platform, a free 'Data Health Check'. You must solve a small, real problem for free to earn the right to solve the whole thing.

Don't send expensive London traffic to a lazy offer. It's the fastest way to burn your budget with nothing to show for it.

Here's How to Structure Your Thinking

Let's put this all together into an actionable framework. This is the main advice I have for you. Work through these steps to build a sensible, data-driven Google Ads budget for your London B2B company.

Why You Might Want to Consider Expert Help

Working through this framework gives you a powerful, logical foundation for your Google Ads budget. But as you can probably tell, execution is complex. The difference between a £300 CPL and a £150 CPL often comes down to expert-level details: campaign structure, negative keyword strategy, match types, ad copy that speaks directly to the 'nightmare', and landing page optimisation.

In a market as expensive as London, making mistakes during that initial data-gathering phase can be incredibly costly. You could easily burn through £10,000 and learn very little if the campaigns aren't set up to learn efficiently. This is where working with an agency or consultant with specific experience can be a sound investment. We've seen firsthand what works and what doesn't for B2B tech companies here. Navigating the world of SaaS Google Ads agencies in London can be tricky, but finding the right partner shortens your learning curve and gets you to profitability faster.

The goal is to accelerate that feedback loop shown in the flowchart above. An expert can help you get to the "Is Real CPL < Target CPL?" decision point faster and with more confidence, saving you time and wasted ad spend. Vetting potential partners is a skill in itself, so it pays to have a clear process for vetting ad spend experts in London before you commit.

If you've worked through this guide and want a second pair of eyes on your numbers and strategy, we offer a free, no-obligation 20-minute strategy session where we can review your plan. We'll give you our honest feedback on your LTV, target CPL, and initial budget assumptions.

Hope that helps!