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From PPC Forecasting Fears to PPC Wins

Updated: Feb 23

From PPC Forecasting Fears to PPC Wins

I am pretty sure this is familiar to all of you, PPCers: you're having your morning coffee, minding your own business, optimizing campaigns left and right, when suddenly, a client demands PPC forecasting. Panic! The mere thought of forecasting sends chills down your spine - it's like trying to predict the British weather, but with money on the line.

Forecasting in the world of paid search is a complex task and not something that many people find enjoyable. As experts in paid search, we rely on data to guide our strategies. However, when data is unavailable, we must turn to prediction, which can be a complex and challenging experience. This highlights the importance of mastering PPC forecasting to enhance client satisfaction and optimize campaign results.

What is not PPC forecasting?

As PPC experts, we're used to dealing with forecasts, targets, and schedules. Each of these terms has a distinct meaning, and it's crucial to understand their differences. Mixing them up can lead to confusion, and we certainly don't want that when managing clients' money.

A forecast is a realistic prediction of what can be achieved through a PPC campaign, while a target represents what the client aims to achieve as a business, which is often higher than the forecast. The schedule is the final plan that is signed off, and the numbers usually fall somewhere between the forecast and the target.

But… how much can we rely on a PPC forecast to be realistic?

PPC experts and clients must embrace that a PPC forecast is all a guesstimate, a data-driven best guess. It is our best analysis of relevant data and our best-informed prediction about the expected outcome. The more quality data available, the more accurate the forecast will be. However, even with the best data, there is still an element of uncertainty, and the forecast is ultimately an educated guess. Confidence in the forecast comes from having a sound approach and logical reasoning backed up by data.

Why Is PPC Forecasting Important?

As annoying as this request may be, a PPC forecast can be really useful for your client and yourself. PPC forecasting helps businesses to plan their budgets and set realistic goals. But it also allows PPCers to:

  • Determine the best Bidding Strategy, as it can help determine the maximum CPAs the client can afford.

  • Optimize Campaigns: It can provide amazing insights into the performance of specific keywords and ad groups. This will enable you to make data-driven decisions to improve the campaign's performance

  • Plan for Seasonal Trends: PPC forecasting can help you identify seasonal trends to prepare for any spikes or dips in traffic during specific times of the year. This can also help you adjust the ad spend and bidding strategies accordingly.

How to Develop an Effective PPC Forecasting Strategy?

  1. Define Your Goals and Determine Your Key Metrics: This first step is standard on almost everything we want to do in PPC. We need to understand what we want to achieve with our campaigns. Is it to increase traffic, sales, or leads? Then, we should determine the key metrics to tell us if we have reached our goal.

  2. Pull your data: The more data you have, the more accurate insights you will get. You will need to collect historical data about your campaign's performance. This includes data about your ad spend, impressions, clicks, conversions, and revenue. Historical data can help you identify trends and patterns in your campaigns' performance, which can help you make more accurate predictions. If you don't have access to this quality data, many tools can help you develop a PPC forecasting strategy, like Google Ads Forecasting, SEMrush, and Ahref….

  3. Build your forecast model: Now that you've gathered the necessary data, it's time to start building your model. Begin with the key metrics of cost, the average cost per click (CPC), click-through rate (CTR), conversion rate (CvR), and average order value (AOV) if revenue is needed. Once these metrics are in place, you can fine-tune the model by adjusting your manual metrics. For instance, if you need to account for a higher CPC, you can tweak the CPC and watch as the other metrics adjust accordingly. Remember to define uncertainty by adding your desired probability parameters to your model.

  4. Do your final checks and adjustments. It's essential to verify that your forecasting aligns with expected trends. Be sure to check for any unusual spikes that may occur unless there's a specific reason for them. You can use year-on-year graphs and variances to identify any areas requiring smoothing. Regularly monitoring your campaigns' performance will also help you adjust based on fresh data to ensure that your forecast is as updated as possible.

In conclusion, PPC forecasting is a critical component of any PPC campaign. Accurate forecasting can help you to plan budgets, optimize campaigns, and measure success. Ito Giwa-Osagie gave us excellent tips to build our forecast model in her talk at our last PPC Live UK event. Check it out and add her learnings to your model.

If you want to learn more about PPC and how to develop winning strategies, don't miss the next PPC event - PPC Live UK event in London on the 24th of April 2024.


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