How Much Do I Need to Spend on a Paid Search (AdWords) Campaign?

Since not every click will become a customer, it is important to cast a wide net and assume that only anywhere from 0.5% to 2% of your clicks will convert to a lead (which isn’t even a guarantee to become a paying customer). We have seen sites and campaigns with a better than 2% conversion rate, but it’s good to be conservative in these estimates and assume that we can’t guarantee above-average performance (not that we won’t aim for that!) So we use the assumption that anywhere from 0.5% to 2% of clicks will convert to leads.

Also, since every click will have a cost, and that cost will vary from business to business, it’s important to look at what the average CPC (cost per click) will be for that company’s terms. That will determine the minimum monthly budget.

For example, if the cost per click for Client A’s terms is $2 per click, on a $500 per month budget, they could get about 250 clicks per month, which could mean anywhere from 1 to 5 leads. That might be perfectly acceptable to some businesses.

But if Client B has keywords that cost $30 per click, on a $500 per month budget, they will only get about 16 or 17 clicks, and 0.5% to 2% of that equals zero leads. That’s obviously not acceptable! This client would need to have a bigger monthly budget and more of an appetite for a higher cost-per-lead.

So we take everything on a case-by-case basis and make recommendations based upon what each client’s average CPC is estimated to look like.

Pam Aungst Cronin
Try SEMRush