How Much Should Service Businesses Spend on Advertising?

By Jordan Evans

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The Challenge of Budgeting for Ads

If you're an HVAC technician, roofer, electrician, or painter, you've likely wondered how much to spend on advertising. It’s tough to strike a balance between allocating too little, risking invisibility, and overspending with no guaranteed ROI. The truth is, there’s no universal magic number for ad spend. It depends on your goals, competition, and the services you provide.

Many service business owners face the same dilemma: advertising costs can pile up, but without the right strategy, throwing more money into ads won’t guarantee leads. On the flip side, spending too little might let your competitors outshine you. For service area businesses, finding the sweet spot for ad spend is crucial for both short-term lead generation and long-term growth.

Balancing the Cost of Lead Generation and Growth

A common guideline is to allocate 5-10% of your gross revenue toward marketing. But the real challenge comes in determining how much of that should go toward advertising. Let’s break down how different service businesses should approach ad spend:

• HVAC Companies: HVAC businesses often deal with seasonality. Spending more on ads during peak summer months when demand for air conditioning repairs is high makes sense. However, don't forget the off-season—running ads for maintenance services in the fall and winter helps secure long-term customers.

• Roofers: Roofers see a mix of emergency and planned projects, especially during storm season. Allocating $2,000 to $3,000 monthly on Google PPC ads is common. Though roofing leads can be expensive (up to $60 per click), the high-value jobs, such as roof replacements, offer significant returns on investment.

• Electricians: Electricians provide both emergency and long-term services, so they need a mix of ad strategies. A budget of $1,000 to $4,000 per month is typical for electricians, who often rely on Local Service Ads (LSAs) and PPC campaigns to secure jobs ranging from quick fixes to full home rewiring.

• Painters: Painters benefit from steady demand, but ad spend often spikes before summer when homeowners prepare for remodels. A budget of $1,500 to $3,000 allows painters to secure one-time projects and build relationships for repeat business.

Why You May Need to Spend More Than Expected

Many business owners are surprised at how quickly their ad budgets are consumed. For service area businesses, the cost-per-click (CPC) can range from $15 to $40, depending on location and competition. That means a $3,000 monthly ad budget might generate between 75 and 200 clicks. With a typical conversion rate of 10%, that’s 7 to 20 leads a month. The key is to ensure those leads translate into jobs and/or work on boosting that conversion rate.

A Real-World Example: JP’s Best Electric

JP’s Best Electric, a trusted electrical services provider based in Clay, NY, is a shining example of what a well-managed marketing strategy can achieve. JP’s Best Electric initially relied on SEO to build their online presence and rank higher in local search results. This brought in steady leads for years, but they didn’t stop there. Understanding the need to scale further, they decided to invest in Google Ads as well.

The results were outstanding.

In 2024 alone, JP’s Best Electric generated 147 leads through SEO and an impressive 311 leads from Google Ads campaigns, all at an average cost per lead of just $79. Even more remarkable, their conversion rate for Google Ads soared to 32%, significantly higher than the industry average of 5%-10%. This success has kept their business growing steadily, no matter the season.

By combining organic SEO efforts with paid advertising, JP’s Best Electric not only attracted new customers but also managed to maintain consistent business year-round. The strategy has enabled them to take on more high-value jobs and avoid the peaks and valleys typical of seasonal demand.

If you’re an electrician, or any service business owner, JP’s Best Electric demonstrates how a balanced advertising strategy can be the key to sustained success.

Key Takeaways: Smart Spending for Smart Growth

JP’s Best Electric shows that while ad spend is important, how and where you invest is even more critical. Here’s how to apply similar strategies to your business:

• Hire professionals for industry-specific strategies: Whether it’s Google Ads, Local Service Ads, or SEO, experts can help you optimize your campaigns and stretch your budget further by targeting the right keywords and audiences.

• Use cost-effective marketing during slow seasons: Incorporating low-cost strategies like email marketing keeps you top-of-mind with past customers and helps generate steady business even when demand slows.

• Combine different approaches: Using SEO to build a strong foundation and Google Ads to generate immediate leads can deliver better results than relying on one strategy alone. Diversifying your ad spend ensures you’re not putting all your eggs in one basket.

Spend Less Time on Advertising

Is your ad spend working for you? At 99 Calls, we specialize in optimizing advertising budgets and helping service area businesses get the most out of every dollar spent. Let us manage your campaigns, offer expert industry advice, and build a year-round strategy for consistent growth. Contact us today to get started!