How to Set a Realistic PPC Budget

At Lillian Purge, we specialise in Local SEO Services and provide practical advice on How to set a realistic PPC budget for your business, helping you allocate spend effectively and achieve sustainable growth.

Setting the right PPC budget is one of the biggest challenges businesses face because there is no universal formula and no platform will tell you the amount you should be spending. Every business is different. Every industry behaves differently. Every campaign performs differently based on competition, intent and keyword structure. In my opinion a PPC budget should never be chosen randomly or based on what someone else spends. It should be built logically by looking at your goals, your margins, your sales process and the realities of your market. When you approach budgeting this way PPC becomes far more predictable and much easier to justify financially.

Many businesses think of PPC budgets in the same way they think of subscription fees or fixed monthly marketing expenses. They pick a number that feels comfortable and hope it delivers. This approach almost always leads to disappointment because PPC does not behave like a fixed marketing channel. PPC is performance driven which means you should build your budget based on achievable outcomes rather than comfort. A campaign that needs £1,000 per month to gather enough data will not suddenly perform well if you give it £150. In my opinion a realistic budget is one that allows your campaigns to gather enough clicks, impressions and conversions to learn effectively so that optimisation becomes possible.

Below is a structured framework that explains exactly how to set a PPC budget that matches your goals, your industry and your financial limits without wasting money or setting unrealistic expectations.

Understand What PPC Is Supposed to Achieve

Before even thinking about numbers you need to be clear about what PPC is expected to do. If you do not define this you end up spending money without knowing whether the campaign is successful or not. PPC budgets must be aligned with intent.

Are you trying to generate leads?

If the goal is lead generation your budget should match your target cost per lead multiplied by the number of leads you want each month.

Are you trying to increase sales?

If the aim is direct purchases your budget should be based on your allowable cost per sale and your expected conversion rate.

Are you trying to test an offer?

If you are validating an idea you may only need a small budget to gather early data.

Are you trying to scale a proven campaign?

Scaling requires higher spend because you need enough volume to grow consistently.

When the goal is defined clearly the right budget becomes far easier to calculate.

Look at the Average Cost Per Click in Your Industry

Cost per click varies massively between industries. Legal services, recruitment, finance and SaaS can see cost per click between £5 and £20. Local trades may see cost per click between £1.50 and £5. Ecommerce categories differ widely depending on the competitiveness of the product.

A realistic PPC budget must acknowledge the market you are entering. If you are in a high value industry with expensive keywords a small budget will not produce meaningful data. For example £150 per month in an industry with a £12 average cost per click gives you only 12 to 14 clicks which is not enough to judge performance. In my opinion a realistic budget is one that allows at least 100 to 150 clicks per month so Google can learn and the campaign can stabilise.

If your cost per click is £5 you will need £500 to £750 per month to reach that level. If it is £1.50 you may succeed with £150 to £250. This is why knowing your CPC matters.

Estimate Your Expected Cost Per Lead or Cost Per Sale

Once you know your cost per click you can estimate your expected cost per lead. This depends on your landing page conversion rate. If your landing page converts at 10 percent and your cost per click is £5 you will pay around £50 per lead. If your conversion rate is only 5 percent you may pay £100 per lead.

This is not exact but it gives you a foundation. You can then ask yourself:

• How many leads do I need each month

• How many leads can I realistically afford

• What is my internal close rate from enquiry to paying customer

• What is the lifetime value of that customer

If each customer is worth £800 and your cost per lead is £50 and your close rate is 25 percent then you pay £200 to acquire a customer. That is profitable. If your cost per lead is £120 and your close rate is 10 percent then PPC becomes financially unrealistic unless your service has very high value.

A realistic PPC budget is one that makes financial sense based on your economics, not wishful thinking.

Factor in Your Learning Period

No PPC campaign works perfectly on day one. Platforms require time to learn. Ads require A/B testing. Audiences require refinement. Landing pages require tweaks. Your first month is rarely your most profitable month. It is your learning month.

A learning period requires budget. You cannot run ten tests on £100. You cannot expect statistically significant results from a handful of clicks. A proper learning phase usually requires one to two months of consistent spend. In my opinion a realistic PPC budget always includes enough buffer for testing. You cannot judge PPC performance until the learning and refinement phase has been completed.

Avoid Choosing a Budget That Is Too Small to Work

One of the most common reasons PPC fails is because the budget is too small to gather enough data. Small budgets slow down testing, limit reach and make optimisation almost impossible. You cannot scale what you cannot measure and you cannot measure what does not have enough volume.

A realistic budget should:

• Allow the platform to exit the learning phase

• Give enough clicks to evaluate performance

• Provide enough impressions for proper testing

• Support at least two or three A/B tests per month

• Allow room for scaling if the results are positive

A budget that does not meet these conditions will make PPC feel broken even if the strategy is sound.

Spread Your Budget Across Time Not Actions

Another important principle is that PPC budgets should be spread consistently rather than spent aggressively. High short bursts of spend rarely outperform steady spending because algorithms optimise gradually. If you invest £2,000 in one month and then nothing for two months you lose momentum, reset the learning phase and confuse the platforms.

It is almost always better to spread the same £2,000 over several months. Consistency is rewarded. Platforms learn your audience patterns, improve your relevance scores and refine your delivery. Your budget becomes more efficient month after month. In my opinion the worst thing a business can do is burn its entire PPC budget in a short period expecting instant results.

Consider Your Competition and Their Budgets

Your PPC results do not exist in isolation. You are competing with businesses that may have larger budgets, stronger offers or more refined campaigns. If your competitors outbid you consistently they appear more often, gain better impression share and dominate the top positions.

This does not mean you must match their budgets exactly. It means you need to understand the competitive landscape. If your industry requires £1,000 per month to compete and you plan to invest £150 you will simply not gather enough visibility to generate results. A realistic PPC budget acknowledges the competitiveness of the market. It works with reality rather than against it.

Decide Whether You Want Results Fast or Economically

Some businesses want PPC results immediately which requires higher budgets because the platform must deliver enough data quickly to optimise effectively. Other businesses prefer a slower, more controlled ramp up with lower monthly spend. Both approaches can work but they produce different timelines.

If you want results fast your budget must be high enough to test several variables quickly. If you prefer a lower spend your results will take longer but your learning curve will be more gradual. A realistic budget aligns with your pace, not someone else’s.

Budget Recommendations for Different Types of Campaigns

The right budget also depends on the type of PPC campaign you want to run.

Google Search Campaigns

Search campaigns require higher budgets in competitive markets but can operate efficiently in local niches. A realistic starting point is £300 to £800 for most small to medium service businesses.

Meta Ads Campaigns

Meta can run at lower budgets because it is interruption based. You can test effectively with £150 to £300 per month and scale when results appear.

LinkedIn Ads Campaigns

LinkedIn requires larger budgets due to high CPCs. A realistic starting point is £500 to £1,500 depending on your industry.

Remarketing Campaigns

These can run cheaply because the audience is smaller. Even £50 to £100 per month can maintain visibility.

A realistic PPC budget must reflect the platform you choose.

Adjust Your Budget Based on Performance Not Emotion

Once your PPC campaign is live your budget should be adjusted based on results rather than instinct. If a campaign performs well you scale gradually. If a campaign performs poorly you refine and reduce spend temporarily. Scaling should only occur after evidence of success.

In my opinion PPC budgeting should always be fluid. Rigid budgets ignore reality. Your spend must follow performance.

Bringing Everything Together

Setting a realistic PPC budget is not about guessing a number or copying what another business spends. It is about understanding your audience, your industry, your costs and your intended outcomes. PPC works when your budget allows for proper testing, data gathering and optimisation. It fails when the budget is too small, too short, too unfocused or too disconnected from your commercial reality.

A realistic budget supports learning, refinement and predictable scaling. It gives you enough room to discover what works and enough flexibility to remove what does not. PPC becomes far more reliable when the budget reflects the level of competition you face and the value of the customers you want to attract. In my view the smartest PPC budgets are not the biggest ones or the smallest ones. They are the budgets that have been chosen logically, based on evidence, and structured to grow as performance improves.

We have also written in depth articles on How Pay Per Click advertising supports Local SEO and The difference between PPC and SEO: when to use each as well as our Pay Per Click Advertising Hub to give you further guidance.