How it’s calculated
Back from the target, in three steps.
- Clicks needed = Conversion target ÷ Conversion rate
- Monthly budget = Clicks needed × CPC
- Daily budget = Monthly budget ÷ 30.4
- Cost per conversion = CPC ÷ Conversion rate
- Expected ROAS = (Target × Average order value) ÷ Monthly budget
An ad budget is worked out backwards from the target: the monthly conversion target divided by your site's conversion rate gives the clicks you need, and the clicks times the cost per click (CPC) give the monthly budget. The daily budget is the monthly budget divided by 30.4.
The calculation shows how much the budget depends on three numbers: doubling the conversion rate halves the budget for the same target. That is why it pays to look at the landing page and the measurement before raising the budget.
A daily budget in Google Ads is an average: Google can spend up to twice the average daily budget on one day, but over a month it will not charge more than 30.4 times the daily budget.
If the expected ROAS is below your break-even ROAS, the target is not profitable at this CPC and conversion rate; compare it in our ROAS calculator.
Limits
- CPC and conversion rate change within the month and with competition; use the result as a starting plan.
- A new campaign goes through a learning period in its first weeks, when costs can run above plan.
- It is for one channel; for Meta or LinkedIn calculate again with their own CPC and conversion rate.
Frequently asked questions
How much should I budget for Google Ads?
Copy linkWork it backwards from the target: target ÷ conversion rate × CPC. That is the minimum budget to reach the target; leaving some headroom above it helps the bid strategy learn.
Why is the daily budget divided by 30.4?
Copy linkGoogle Ads caps monthly spend on an average month of 30.4 days: in a month you won't pay more than 30.4 times your average daily budget.
What if I don't know my conversion rate?
Copy linkUse a similar campaign's rate over the last 90 days if you have one. If not, start with a low estimate and redo the calculation with the first month's real data.
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