PPC Forecasting Guide – How to forecast in Paid Search

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

Do…

• 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.

Don’t…

• 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