Know how many leads you want each month? Three numbers tell you what Google Ads will cost to get them: the leads you want, your conversion rate and your cost per click.
The formula
- Clicks needed = leads you want ÷ (conversion rate ÷ 100). Round up to a whole click.
- Monthly budget = clicks needed × your average cost per click.
- Cost per lead = monthly budget ÷ leads you want.
- Average daily budget = monthly budget ÷ 30.4.
Google Ads defines conversion rate as conversions divided by the ad interactions they came from, average cost per click as the total cost of clicks divided by clicks, and average cost per action (CPA) as the total cost of conversions divided by conversions. Google uses 30.4 as the average number of days in a month (365 ÷ 12), so dividing by 30.4 gives a daily budget to start from. On any one day Google can spend up to twice your average daily budget, but for most campaigns it never charges more than 30.4 times it in a month.
Worked example
These are example numbers, not results from any account.
- Leads wanted: 20 a month
- Conversion rate: 5%
- Average cost per click: $2.50
Clicks needed: 20 ÷ 0.05 = 400 clicks. Monthly budget: 400 × $2.50 = $1,000.00. Cost per lead: $1,000.00 ÷ 20 = $50.00. Average daily budget: $1,000.00 ÷ 30.4 = $32.89.
Lookup table
Example monthly budget at an example cost per click of $2.50. Find your conversion rate on the left and the leads you want across the top.
| Conversion rate | 10 leads | 20 leads | 50 leads | 100 leads | Cost per lead |
|---|---|---|---|---|---|
| 2% (example) | $1,250 | $2,500 | $6,250 | $12,500 | $125.00 |
| 5% (example) | $500 | $1,000 | $2,500 | $5,000 | $50.00 |
| 10% (example) | $250 | $500 | $1,250 | $2,500 | $25.00 |
Your own cost per click changes every number here. To use your figure, multiply the budget in the table by your cost per click and divide by 2.50.
What to do with the number
- Start from your real conversion rate. Pull it from the last 30 to 90 days in your account. A new account has no history, so treat any starting rate as a guess and check it after the first few weeks.
- Raise conversion rate before you raise spend. In the table, moving from 2% to 5% cuts the budget for the same leads by more than half.
- Watch cost per lead, not clicks. If cost per lead climbs above what a lead is worth to you, fix the ads, keywords or landing page before adding budget.
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About the author
- Bidhelm runs your Google Ads and your X profile.
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