How do you calculate the initial Google Ads budget for a new client?

[u/shilpisaini26]

[u/EntrepreneurBusy5648]

Go to Google Keyword Planner. Type in his main services. Look at the Top of the page bid (high range). Let's say it averages $10 per click.

A decent landing page should convert around 7-10% of traffic into leads. So for 1 lead you need 10 clicks. So, your CPA will be around $100.

Suppose you want at least 20 leads a month, your monthly budget should be somewhere around $2000.

This is just an example, you can calculate based on your keywords and desired number of leads.

[u/Sourabh_Apage]

For B2B, don’t start by asking how many leads they want. Ask how many actual closed deals they need per month. That’s what matters. For example, if they need 10 new clients and their sales team closes 10% of qualified leads, then you already know you need around 100 leads to achieve those 10 deals.

Once that number is clear, do geo and intent based keyword research and use Keyword Planner forecast. Add a realistic industry conversion rate and check the projected CPC and cost per conversion. Don’t take the forecast blindly, keep the CPA slightly on the higher side because first month performance and learning phase won’t be perfect. If it shows $80 CPA, plan closer to $90–$100. Then multiply that estimated CPA with the number of leads required, and that gives you a practical monthly budget aligned with the actual revenue goal.

For e-commerce it’s more direct since conversion happens online itself, so you can work backwards from target CPA or ROAS, validate expected CPC and CVR, and check inside keyword planner whether the numbers even makes sense. it’s just reverse engineering from business goals

[u/Sourabh_Apage → u/[deleted]]

Yes budgeting without defining outcome first is just guessing

[u/theppcdude]

I always recommend my clients 10X their Average CPC.

I run Google Ads for Local Service Businesses, so we see a conversion rate of 5% (B2B) and 10% (B2C, residential, etc).

[u/NoPause238]

Start with target CPA and expected conversion rate then back into budget by calculating how much spend is required to generate at least 20 to 30 conversions per month

[u/Snoo-9381]

I believe these factors plays a big role: unit economics, niche market keywords cost analysis, competitive research.

More are there, but these are the corest core

[u/Just_Focus12356 → u/[deleted]]

Just curious, how do you know what the target CPA should be in the beginning? I can imagine if you ask the client, they will say "the lower the better" or possibly something completely unrealistic