In the world of pay-per-click (PPC) advertising, clients often request that we provide PPC forecasting to validate their budget allocations. The process of forecasting in paid search is not an easy task, and it’s uncommon to find someone who genuinely enjoys it. As specialists in paid search, we typically rely on data to inform our strategies. However, when the necessary data is yet to be obtained, we must venture into the realm of prediction, which can be a challenging experience. This underlines the significance of mastering paid search forecasting to better serve clients and optimize campaign outcomes.
What is PPC forecasting?
It's a data-driven best guess
Ultimately, it’s all a guesstimate. You use as much quality data you can get, and make an educated guess as to what can be delivered. If you can be confident in your logic/approach (and you have data to back up your decisions), you can be confident in your forecast.
Understand the difference between a forecast, and a target
For me, there are three terms banded around that makes this whole process even more confusing. Before we start, we have to clearly define the difference.
Forecast = a data driven prediction with deliverables to try and achieve a goal. It’s a realistic guess.
Target = what the client needs to achieve as a business. This will no doubt be higher than the forecast.
Schedule = Is the final signed off plan, the numbers are probably somewhere in between a forecast and a target.
Why is PPC forecasting so stressful?
When you start forecasting in Paid Search, there’s no doubt that it can be a stressful process all in all. Here are some of the key reasons why;
Forecasting for every account is slightly different
True – but the process to complete it is pretty much the same
There is no set process for delivering forecasts
That’s because there is no one way to do it but hopefully today you will feel differently
It is difficult if I am new to an account / haven’t worked on it for a full year
Again the process should help with this
I don’t understand the non seasonal peaks & troughs of the account
There is usually someone in your team who does
It requires a lot of thought
Yes it does
I don’t want to be held responsible if it is wrong
Growth through discomfort!
What can you do to make Paid Search forecasting less stressful?
Remember UPOD (Under Promise, Over Deliver)
When you forecast, it’s always better to under promise on the predictions and over deliver on the actuals. Trust me, if you pitch in a number that’s too high and you can’t deliver on it, then you’ll have more trouble than it’s worth. Don’t over promise and under deliver.
Of course, the same can be said i you under promise and over deliver by too much
It makes the original forecast look rubbish, and this can also be troublesome. You need to find the balance.
Getting stressed just thinking about this? Don’t worry, we’ve got all the steps broken out for you below. Calm down and keep reading!
The Paid Search forecasting process is like baking
As with forecasting, baking is about following a recipe (process) to deliver an end product. But as with any recipe, you might go back and tweek it too add more/less ingredients. As you practice and as time passes, you refine your processes and what you bake is something delicious. Forecasting is the same!
Step #1 - Pull the data
All forecasts are dependent on ensuring that you have data to forecast with. Quality data ensures that your forecast has a strong enough foundation to work with. Without it, anything you forecast will be inaccurate. This is the most important step and often the most time consuming.
Here’s a map you can follow when gathering your data:
There is no point moving onto the next steps if you haven’t followed the map above and gathered enough quality data to make accurate enough decisions.
Step #2 – Build your models
Now that you have the data that you need, you can now start building up your modeling. Start off with Cost, Avg CPC, CTR, CvR and AOV (if you need Revenue). The rest of your model can then be worked through tweeking your Manual Metrics. For example, if you need to factor in an increased CPC you can change the CPC and then your other metrics will change alongside this.
Once you have built your sheet, you can start forecasting.
Step #3 – Forecast in this order
It’s important to take a bottom up approach to PPC forecasting. You need to start with your Brand, then competitor, then other (for example, Google Shopping campaigns), and then finally the Generics.
The reason you do this is because you are ensuring that you are focusing your budget on the most efficient areas first. If you maximise the potential in these areas first, the numbers will then tell you what you can do with your less efficient areas where there is more volume to achieve.
Step #4 – Do your final checks
Make sure that you check that your forecasting follows the expected trends. Ensure there are no random spikes that look particularly unusual (unless there is a specific reason for doing so). You can use Year on Year graphs and variances here to determine if there is anything you need to flatten out.
Top Tip – Borrow another pair of eyes
When you have been knee deep in an excel sheet for hours on end, you can get dazed and confused by all of the numbers. It’s good to get a fresh pair of eyes on the numbers to see if they agree with your logic. This also helps remove the uncomfortable feeling you may have about forecasting, having someone else’s reassurance can give you a confidence boost.
Step #5 – Go back to forecasts, actualize and reforecast
There’s no shame in having to go back to forecasts that you have done and changing the numbers. No forecast should be set in stone. Go back each month and actualize the numbers to see how far off your forecast was from the actual numbers you delivered. You can then use this information to re forecast the remainder of the year. In theory, your forecasting will become more accurate throughout the year.
Remember the PPC forecasting Do’s and Don’ts
Check with members of your team to understand any unknown peaks & troughs
Be conservative with uplift figures (UPOD)
Use uplifts similar to those seen in previous years unless you are confident of otherwise
Check final forecast against last years figures to ensure no crazy jumps in performance
Be as granular as you can with your initial data set
Forecast, actualize and reforecast if needed.
Pretend it will go away if you ignore it!
Feel as if the task is your burden alone… if you are struggling, ask your community for help
Take any information from Google trends as being final, it needs to be sense checked against actual data
Use unrealistic uplift figures unless there is a genuine reason for doing so
PPC Forecasting FAQ
What is forecasting in PPC?
PPC forecasting refers to the way that you use data to help make predictions on the future. The aim is to get as much data as possible to help make a well informed prediction on what the impact of multiple scenarios will have on your campaigns.
How to calculate the Right PPC Advertising Budget?
When asked about what is a good budget for your Google Ads account, you need to take into account all of the different variables. Your industry, how competitive the auctions are, the search queries, your objectives, your profitability & more. There isn’t a single answer for this. It’s therefore recommended that you seek expert advice and do your research!
How much do Google keywords cost?
How much your Google Keywords cost will vary on the search terms, your industry, how competitive the auctions are, your quality score, your objectives, your profitability & more. There isn’t a single answer for this. It’s therefore recommended that you seek expert advice and do your research!
Dan has worked at some of the largest global network agencies. He was awarded Rising Star at The Drum Search Awards and Google voted him as one of the Top 20 Search Specialists in the UK. He founded Search Engine Hubbub (formerly PPC hubbub) after becoming frustrated with the lack of actionable insight from industry blogs.