Work Backwards From the Jobs You Want to the Ad Budget You Need

Ask a business owner how they set their advertising budget and the honest answer is usually a round number that felt survivable. A thousand a month. Five hundred. Whatever was left. Then the campaign runs, the results are ambiguous, and nobody can say whether the number was too small, too large, or simply pointed in the wrong direction.

There is a better way to arrive at the figure, and it starts from the far end: how much work do you actually want?

The four numbers you need

You need what a customer is worth, how many extra you want each month, how often an enquiry turns into a customer, and how often a click turns into an enquiry. Multiply and divide in the right order and the budget falls out of it.

1. Start with the jobs you want. Say ten extra a month, on top of what search and referrals already bring in.
2. Divide by your close rate. Close three enquiries in ten and you need roughly thirty-three enquiries to get ten jobs.
3. Divide by your landing page conversion rate. If five in a hundred visitors make contact, thirty-three enquiries needs about six hundred and sixty clicks.
4. Multiply by your cost per click. At eight dollars, that is a little over five thousand a month in platform spend.

That figure may be higher than you hoped. It is still worth having, because now you are looking at a number with reasoning attached rather than a guess, and every input in it is something you can go and change.

Be honest about the close rate

This is where the arithmetic usually goes wrong, and it goes wrong optimistically. Owners tend to quote their best month. Count last month properly — enquiries in, customers out — and most local businesses land somewhere between twenty and forty percent, not the sixty they remember. Ten points of optimism here understates the required budget by half.

A budget built on the close rate you wish you had is not a budget. It is a shortfall with a start date.

Where the number improves fastest

Once the calculation exists, it also tells you which lever is cheapest to pull. Almost always it is the conversion rate rather than the spend.

• Moving a landing page from three percent to six halves your cost per lead without buying a single extra click.
• Tightening the targeting to the area you genuinely serve removes clicks that were never going to convert, which raises the effective conversion rate for free.
• Answering the phone reliably raises the close rate, and in urgent categories unanswered calls are the largest hidden cost in the whole account.
• Splitting urgent searches from considered ones stops emergency prices being paid for research traffic.

Buying twice the traffic to fix a page that does not convert is the most expensive way to solve that problem, and it is the one most accounts reach for first.

The floor nobody mentions

There is a level below which the arithmetic stops being the constraint. In most local categories, under about a thousand a month an account never gathers enough conversions for the platform to optimize against, so you pay for a learning period that never finishes. That is a different problem from a budget being unaffordable, and the answer is usually to narrow the targeting rather than to spend more — or to put the money into local search and reviews, which cost nothing per click.

If you would rather not do the multiplication yourself, the ad budget calculator runs it and tells you whether the result is viable, which is the part most calculators leave out. For what management costs on top of platform spend, we have written that down plainly on how much paid advertising costs. And the ongoing work itself is paid advertising.