PPC Budget Calculator
Most paid media budgets are set by taking last month and adding a bit. This does it the other way round: start with the revenue the business needs, work back through order value, conversion rate and cost per click, and find out what the plan actually costs — and whether the margin behind it can carry the answer.
INPUTS
Six
RUNS IN
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FORMULA
Printed below
A budget is a consequence of a target, a conversion rate and a click price. It is not a starting point.
- The calculator
What the target costs, before anyone commits to it
Start with the revenue number the business has already agreed, then let the account data decide what it takes to get there. Six inputs, all of which you either know or can pull in five minutes.
Paid revenue is the target times the paid share. Divide by average order value for the orders required, divide again by the conversion rate for the clicks, and multiply by cost per click for the budget — at the defaults that is 635 orders, 19,853 clicks and $16,875. Cost per order simplifies to cost per click divided by conversion rate, so it moves on those two alone. The figure this calculator cannot give you is whether the auctions will actually deliver that many clicks at that price: past a certain volume the cost per click rises, and the honest way to find that ceiling is to walk the budget up and watch it.
- Reading it
The budget is an output, and the click price is the risk
Two of these six inputs decide almost everything, and only one of them is under your control.
Cost per order is cost per click divided by conversion rate, which means the budget scales linearly with the click price and inversely with the conversion rate. Take the defaults: at a 3.2% conversion rate and 85 cents a click, an order costs $26.56 and the plan works comfortably. Let the click price drift to $1.20 and the same target needs $23,800 — a 41% increase in budget for exactly the same revenue, with nothing having changed on the site at all.
That asymmetry is why conversion rate work usually beats bid work. A move from 3.2% to 3.8% cuts the required budget by about sixteen per cent and keeps cutting it every month afterwards, while a bid reduction that wins you a lower click price is competitive and temporary. Run the plan at both your current conversion rate and a realistic improved one before signing off the number — the gap between them is the business case for the CRO work.
- Use paid-traffic conversion rate and order value, not sitewide figures
- Model a 20% higher click price as well — auctions do not stay still
- Check the answer against what the account can actually spend at that price
- Getting it wrong
Four ways a PPC budget goes wrong on paper
Each of these produces a plan that is internally consistent and undeliverable.
Using sitewide conversion rate
Paid traffic converts differently from email, direct and organic, usually worse. Planning a paid budget on a blended rate understates the clicks needed, often by a third, and the overspend appears in week two.
Assuming the click price holds at scale
Doubling the budget does not buy twice the clicks at the same price. You buy the cheap inventory first, and the marginal click gets steadily dearer. Any large increase should be modelled at a higher cost per click than today.
Setting the budget before the target
A budget chosen first is a number with no argument behind it. Working back from revenue at least makes the assumptions visible, so the conversation becomes about whether the conversion rate is real rather than whether the budget feels big.
Ignoring what paid takes from organic
Some share of paid orders would have arrived through organic or direct anyway. Without a holdout test that share is unknowable, so treat the contribution figure here as the optimistic end of the range.
Our break-even ROAS calculator works the margin side in more detail, and the PPC budget template takes the answer from this page and paces it across a quarter by channel. Running it the other way — from the traffic you already have to the revenue it produces — is the eCommerce revenue calculator.
- Questions
PPC budget FAQs
The questions this calculator usually raises.
How much should I spend on Google Ads?
Enough to buy the orders your target needs at the cost per order your margin can carry — which is what this calculator works out rather than guesses at. Percentage-of-revenue rules of thumb are popular because they are easy, but they ignore conversion rate, order value and click price entirely, and those three decide the answer. Start from the target, check the implied ROAS against break-even, and only then compare the figure to what you spent last year.
What is the difference between this and the PPC budget template?
This calculator sizes the budget. The PPC budget template is a spreadsheet that takes a budget you have already agreed and paces it — splitting it by channel and campaign, tracking spend against plan week by week, and flagging when a campaign is running hot. Size it here, pace it there.
Should I use a thirty-day month for the daily budget?
It is the convention and it is what platforms use for a monthly cap, which is why this calculator does the same. If you are planning an actual calendar month, divide the total by the real number of days instead — the difference between 28 and 31 days is more than ten per cent of daily spend, which is enough to matter at the end of February.
What if the implied ROAS is below break-even?
Then the plan loses money on first purchase, and you have three honest options: raise the conversion rate, raise average order value, or accept the loss deliberately because the customer is worth more than one order. Our LTV calculator tells you whether the third option is real for your repeat rate, rather than a hope.
Does this cover Meta, Amazon or Microsoft Ads?
Yes. The arithmetic is platform-agnostic — any channel where you have a cost per click, a conversion rate and an order value fits the same model. Run it once per channel rather than once blended, because the click prices and conversion rates usually differ by more than the budget split does.
Why is my budget so much bigger than last year for the same target?
Almost always the click price. Cost per order is cost per click divided by conversion rate, so a 30% rise in click price puts 30% on the budget with nothing else changing. Enter last year’s cost per click alongside this year’s and the gap between the two budgets is the auction inflation you are absorbing.
- Next
Related tools and reading
CALCULATOR
The margin side in detail: the return on ad spend a campaign has to beat before it makes money.
TEMPLATE
Takes the budget this page sizes and paces it across a quarter by channel, with variance flagged weekly.
GUIDE
Account structure, bidding, feeds and measurement — how the budget gets spent once it is agreed.
Budget agreed, confidence low?
The gap is usually the conversion rate the plan assumes. The free audit checks whether paid traffic converts the way the spreadsheet says before the money goes out of the door.