How to Calculate Adwords PPC Budget Forecast

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Marketing managers usually rely on their agency partner to get PPC budget forecast and therefore miss the nitty-gritty of how it’s calculated. Reason? It might sound overwhelming if you are new to PPC Marketing and most PPC agencies would rather avoid this topic unless asked specifically.

However, it doesn’t have to be this way. As a savvy marketer, you should be in full control of your marketing budget and spend. Therefore knowing what’s involved and how to calculate and forecast your PPC budget is critical.  

First, what is involved in calculating a PPC budget forecast? Here are some key questions you need to answer:

Things to know to calculate the budget forecast:

  • Type of Business:
    Is your business B2B or B2C?
  • Marketing Goal:
    What is the goal of your marketing activity?
  • Target Markets:
    Where are your target customers located?
  • Target Keywords:
    What are some of the words your customers may search to find your products/services?
  • Monthly Budget:
    How much are you looking to invest in marketing every month?
  • Customer Lifetime Value:
    What is the average value of a customer for your business?

That’s a great start. Having answered these questions, you are more than equipped to calculate the budget forecast of your PPC campaigns. Here is the step by step process:

Steps to calculate the PPC budget forecast:

  • Keyword Research:
    Research keywords using Adwords keyword planner tool to get all available keyword suggestions, your prospects are searching for to find products or services like yours
  • Search Volume:
    You can download these keyword suggestions in an excel sheet, filter out the irrelevant keywords and then get a sum total of search volume all target keywords.
  • Average Suggested Bid:
    Keyword planner data also comes with suggested bids against every keyword. The next step is to calculate an average of suggested bids for all of your target keywords

Great, you are just one step away from getting the budget forecast for your PPC campaigns. Following are the metrics you would need to know for an effective budget forecast along with their respective methods for calculation:

Metrics for the effective budget forecast:

  • Estimated CTR
  • Estimated Clicks or Visits
  • Estimated Conversion Rate
  • Estimated no of Leads or Sales
  • Estimated Monthly PPC Budget
  • Suggested Daily PPC Budget
  • CPA – Cost Per Lead or Sale
  • Customer lifetime value
  • ROI (Return on investment)

Sounds overwhelming? Contact us today and one of our human robots will prepare the budget for you.

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