Budgeting for PPC Campaigns (With Real Examples)

Most people set PPC budgets based on what they can afford rather than what they need to achieve their goals - a choice that makes sense in the moment but leads to poor outcomes. Start with your target cost per acquisition and work backward to determine how much you need to spend to get the results you want - because that’s smart budgeting.

Calculate Budget Based on Goals

Start with your conversion goals and target cost per acquisition. If you need 50 leads per month and each one costs $100, that’s $5000. If you want 100 sales at $50 cost per acquisition, you need $5,000. Your budget should reflect your CPA target and expected volume… not just a random number you picked.

Think about cost per click and conversion rates - try and get the best numbers you can. You can use Google Keyword Planner and industry benchmarks for estimates. If your target keywords cost $5 per click and you expect a 2% conversion rate, you need 50 clicks to get one conversion. That means each conversion costs $250 in ad spend - plus your actual cost per acquisition target.

Plan your budget allocation by funnel stage. For bottom-funnel campaigns targeting high-intent keywords, allocate 60%. Give 30% to mid-funnel comparison and research terms. Top-funnel awareness campaigns should get 10%. Bottom-funnel converts better but has limited volume. Top-funnel has more volume but lower conversion rates.

Industry Budget Ranges and Testing

Ecommerce businesses typically need $3,000-10,000 monthly to see meaningful results, depending on product prices and competition. Fashion and electronics are more competitive and expensive. Home goods and specialty products often cost less per click but may have longer sales cycles.

B2B companies usually need $5,000-15,000 monthly because cost per clicks are higher and sales cycles are longer. Software, consulting, and professional services often pay $20-100 per click for competitive keywords. Extra acquisition costs are justified and balanced by the higher customer lifetime value.