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How to Forecast PPC Costs and Revenue – Practical Ecommerce

How to Forecast PPC Costs and Revenue – Practical Ecommerce

I’m often asked to project pay-per-click costs and revenue. The task is challenging owing to variables such as historical data, trends, competitors, and, critically, unforeseen factors.Nonetheless, here’s my approach.Historical DataReviewing past data is my first step in assembling projections. The static numbers are helpful, but the real value is the trends. Say I’m projecting costs and revenue for the first six months of 2024. Here are example spend, revenue, and return on ad spend figures for the first six months of the previous three years. JanuaryFebruaryMarchAprilMayJune Spend: 2023$40,000$39,000$42,000$55,000$59,000$63,000 Spend: 2022$37,000$38,000$40,000$48,000$52,000$54,900 Spend: 2021$38,000$38,500$39,000$46,000$48,000$51,000 Revenue: 2023$83,000$79,500$88,500$135,000$145,000$156,000 Revenue: 2022$74,000$81,000$81,000$107,000$122,000$130,000 Revenue: 2021$60,000$63,500$82,100$101,000$110,000$115,000 ROAS: 2023107.50%103.85%110.71%145.45%145.76%147.62% ROAS: 2022100.00%113.16%102.50%122.92%134.62%136.79% ROAS:… 

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