How to set a PPC budget for your business
A PPC budget is the amount you are willing to spend on clicks and impressions over a set period. There is no standard figure that suits every business, and picking a round number is the wrong way to choose one. The reliable method is to work backwards from what a new customer is worth to you and what it costs to win one through Google Ads.
Start with what a customer is worth
If you know the average profit a new customer brings, you know the most you can afford to pay to win one. A business that makes GBP 50 profit on each first purchase, for example, cannot sensibly pay GBP 60 for a click. The cost per acquisition has to sit comfortably below the value of the customer, or every sale makes the problem worse.
Work backwards to a budget
Decide how many new enquiries or sales you want from ads in a month, multiply that by your target cost per acquisition, and you have your starting budget. Want 20 enquiries a month at a target cost of GBP 25 each? That is GBP 500 a month in ad spend before you test a single assumption.
A worked example helps. A bathroom fitter knows each job is worth GBP 3,000, and roughly one in four enquiries becomes a job. One enquiry is therefore worth around GBP 750 to the business. Paying GBP 50 to generate that enquiry leaves GBP 700 of margin, which is a healthy return. Aiming for ten enquiries a month gives a starting budget of GBP 500. The arithmetic matters more than the figure: the budget follows from the value of the customer, never the other way round.
Start small and scale what works
New accounts rarely convert well on day one, whatever the budget. Give yourself room to test: a few campaigns, a tight set of keywords, a handful of ads and a landing page built to convert. Review performance weekly, pause what is wasting money, and move spend toward what is producing enquiries at a cost you can live with. The account that makes GBP 500 work well is a better foundation than the account that burns GBP 2,000 on untested assumptions.
Budget is ad spend, management is separate
The figure you commit to Google buys you clicks. Running the account well is a separate job: keyword research, ad copy, bid management, negative keywords, landing page testing and reporting. Our digital marketing packages start at GBP 849 per month and include a managed PPC service, so you know the whole programme's cost rather than just the clicks. See https://victory.digital/pay-per-click for what a managed campaign involves.
Common mistakes to avoid
The first is treating the budget as a fixed ceiling rather than a working figure. The second is judging success by clicks instead of cost per acquisition, which flatters an account that is generating nothing. The third is giving up after two weeks: Google Ads needs time to gather data, refine bids and find the searches that convert. Set a review window of at least a month before you draw conclusions.
Review the number at least monthly
Costs per click move with competition and season, and your own conversion rate changes as the account matures. Set the budget once and leave it alone and you will either overspend or miss opportunity. A monthly review keeps the figure matched to the results, and it is the point at which you decide whether to hold, trim or scale.
If you would like help setting a sensible PPC budget and running the campaigns, our team plans and manages Google Ads for businesses across the UK. See the digital marketing packages and pricing at https://victory.digital/digital-marketing-packages.
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