PPC Budget & ROI Calculator
Calculate exactly how much you need to spend on Google Ads or Meta Ads to reach your revenue goals.
How to Calculate Your PPC Budget
Planning a Pay-Per-Click (PPC) campaign requires more than just picking a random number. To ensure profitability, you must work backward from your revenue goals using key performance indicators (KPIs) like Conversion Rate and Cost Per Click (CPC).
Budget = (Revenue Goal / Average Sale Value) / (Conversion Rate / 100) * CPC
Understanding the Key Metrics
Target Monthly Revenue: This is the total gross income you want to generate specifically from your paid search or social ads.
Average Sale Value (AOV): How much a single customer spends on average. If you are a lead-generation business, use your "Value Per Lead" or "Lifetime Value" here.
Conversion Rate: The percentage of website visitors who complete a desired action (like buying a product or filling out a form). For most industries, 2% to 5% is a standard benchmark.
Cost Per Click (CPC): The amount you pay every time someone clicks your ad. This varies wildly by industry—legal keywords can cost $50+, while e-commerce clicks might be $0.50.
PPC Calculation Example
If you want to earn $10,000 in revenue, and your product costs $100, you need 100 sales. If your website converts at 2%, you need 5,000 clicks (100 / 0.02) to get those sales. At an average CPC of $1.00, your required monthly budget would be $5,000.
Why ROAS Matters
ROAS (Return on Ad Spend) tells you how many dollars you earn for every dollar spent. In the example above, earning $10,000 from a $5,000 spend results in a 2.0x ROAS. Most businesses aim for at least a 3.0x to 4.0x ROAS to cover product costs and overhead.