Offline Conversions
Part of Paid search bidding and budget controls
Setting a daily budget from business economics
Use customer contribution, cash and capacity limits to set a Google Ads average daily budget, with spending-limit and rounding caveats.
Start with the monthly amount the business can commit to one Google Ads campaign. Then check whether customer contribution and the path from enquiry to sale give that spend a plausible purpose. The setting is an average daily budget, not a fixed charge each day.
Work back from a customer
Choose a consistent contribution measure: realised revenue less the variable costs the business includes for an additional sale. Decide how much can fund acquisition while leaving room for other costs and the required return.
For a lead campaign, multiply the allowable acquisition cost per customer by the observed share of accepted enquiries that become customers. This gives a provisional allowable cost per accepted enquiry, not a click bid or a promise about the next lead.
For illustration only, suppose a business records A$400 contribution per new customer, reserves A$280 for other needs and allows A$120 for acquisition. If one in four accepted enquiries becomes a customer in its records, the provisional allowance is A$30 per accepted enquiry. If the close rate is unknown, record it as unknown rather than deriving a precise lead allowance.
Keep form submissions and accepted enquiries separate. If only a share of submitted forms pass assessment, include that acceptance rate before comparing an allowance with cost per form submission.
Convert the commitment to a setting
Check cash available during the review period and how many new enquiries or orders the team can handle. The initial spend plan must fit both. To calculate an average daily budget from the monthly commitment, divide the commitment by the number of days it covers: monthly commitment ÷ days in the period = average daily budget.
Treat the monthly commitment as a cash-planning limit, not a forecast of leads. Check the campaign’s expected spend against the business’s available cash.
| Input | Business record to use | If uncertain |
|---|---|---|
| Contribution per customer | Order and cost records | Use a range or hold the scale decision |
| Accepted-enquiry-to-sale rate | Assessed enquiries and sales | Measure it before setting a precise lead allowance |
| Capacity | Staffing and fulfilment plan | Limit spend to work the team can handle |
| Cash commitment | Approved advertising plan | Keep the campaign setting within it |
Spending can vary by day. Review commitments across campaigns and keep a separate account-level cash plan.
Setting a Daily Budget from Business Economics
- Determine monthly advertising commitmentBased on available cash and approved advertising plan
- Calculate average daily budgetMonthly commitment ÷ number of days in the period
- Align with team capacityEnsure the campaign can handle new enquiries or orders without overburdening staff
- Review against cash availabilityKeep spend within the business’s cash-planning limit
Key Inputs for Daily Budget Setting
- Capacity constraints
- Staffing and fulfilment limits must align with expected lead volume
- Cash commitment
- Approved advertising budget, treated as a planning limit
Review actual outcomes
Compare spend with accepted enquiries, closed customers and contribution on a consistent basis, allowing for sales still pending. Increase the commitment only if suitable demand and fulfilment capacity justify it. Record the assumptions, approved amount, campaign setting and review date; recalculate when margin, capacity or lead quality changes.
