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What is a realistic PPC budget for lead generation?

Budget is set by click cost and the volume you need, not by a round number.

Your budget is not a round number you pick, it is the answer to a short calculation: real cost per click in your market, times the clicks needed to produce the leads you want, at your landing page conversion rate.

The calculation

  • Find real click costs. Use Google's Keyword Planner on your actual service terms, in your actual geography. Ignore national averages.
  • Estimate landing page conversion. If you have no data, plan conservatively and measure from launch. A dedicated page beats a homepage, every time.
  • Decide how many leads you need monthly to hit your sales goal, using your own close rate.
  • Work back. Leads needed divided by conversion rate gives clicks. Clicks times cost per click gives monthly ad spend.

Worked example: you need 30 leads, your page converts 8 percent of visitors, and clicks cost $9. That is 375 clicks and about $3,375 per month in ad spend. Change the click cost to $25, as it is in many legal and medical categories, and the same 30 leads need roughly $9,400. Neither number is wrong, they are just different markets.

Sanity check against a floor

Campaigns also need enough data to optimize. We recommend about $3,000 per month in Google ad spend, and Meta can work from around $1,500 per month. Geofencing needs $5,000 per month to be worth running, and connected TV or OTT needs $10,000 per month for a tight single market or $15,000 and up for a full metro. Those are all ad spend and exclude management fees.

Add the management cost before you commit

Our fee is 10 percent of ad spend with a $1,500 per month minimum, plus $350 per month per additional platform. So a $3,000 per month Google program is really $4,500 per month all in. Knowing that up front is better than finding out in month two.

If the math does not work

If the required spend is beyond what you can sustain for six months, do not start a half sized version. Spend the money on local search visibility and a site that converts, and come back to paid when the budget is real.

Related: What is the minimum ad spend you recommend?, Does LevelUp Digital offer retainer services?, When Should Start Ups Start Spending on Ads, and our PPC advertising page.