The art of forecasting: how to build a realistic PPC forecast
Clients ask me for a PPC forecast all the time. I review the data, assess the opportunities and present the numbers. The feedback tends to be one of three things: it’s too conservative, it’s too ambitious, or it’s fine but doesn’t match what’s in the business plan.
A forecast that ignores the business behind it is bound to cause friction later. Here’s how I approach forecasting, so the numbers are realistic, grounded in data and useful as a roadmap.
Start with the business goals, budget and KPIs before touching the numbers
Use past performance as your baseline
Present three scenarios rather than a single number
Be conservative where the data is thin, and say so
Data is everything
To build a forecast properly, you need several key pieces of information from the business first.
Time period
Monthly, quarterly, six-monthly or annual, and which breakdowns you’ll measure against.
Main metrics
Whether success is measured in engagement, leads, sales or return on investment.
End goal
What the campaign is ultimately there to achieve for the business.
KPIs
Any specific targets the business already works to, such as cost per lead.
Media spend
The budget available, and whether it rises or falls through the year.
Seasonal and other factors
Busy periods, a new website, new products or sales promotions that will affect activity.
Stage 1: gather the facts
The first stage is a fact-finding exercise. Gather as much information from the business as possible, so you can sketch out a rough plan and check whether the objectives are realistic. If a business wants to triple its growth while slashing paid spend, that needs flagging early so expectations are set properly.
1. Understand the plan
Get the business goals and plan, and check they’re achievable with the budget available.
2. Set a baseline
Review past and current performance in the platform, then plot a month-on-month trend for your key metrics.
3. Find the levers
Factor in what could be improved in the account and on the website, plus seasonal changes. These are your push and pull levers.
Stage 2: build three scenarios
Next, create three scenarios for the forecast.
Performance as is
If nothing changes, what would the current trend look like?
Optimised campaign
If you made every improvement you’ve identified, what uplift could that realistically give?
Enhanced campaign
If spend increased significantly, what are the potential gains, is there a ceiling, and at what point does performance start to drop off?
The aim is to see whether there’s scope to increase spend and whether performance can be improved significantly. If there is, build that into the forecast. If the data is limited, be more conservative and say so clearly. A realistic number guided by data is far better than an optimistic one that comes back to haunt you later.
What makes a good forecast
A forecast is more than plotted numbers. It’s a chance to assess the business and what it needs, and to give a roadmap for getting there. It also opens up useful questions: could other channels help, would more media spend pay off, and is there work needed on the website or offline?
A good forecast
Presents the data clearly
Gives an outline roadmap
Shows whether you’re on track or falling behind
Reflects the business objectives
A poor forecast
Ignores the business plan
Promises numbers the data can’t support
Sets the campaign up to fail
If you’re planning a new campaign, my guide on how much a small business should spend on Google Ads includes a worked budget example to help you set expectations.
Need help building a realistic forecast?
If you’re planning a campaign or need a forecast you can trust, I’ll look at your data and tell you honestly what’s achievable.
