Plan an advertising budget from clicks to customers

When this helps

Before buying traffic, you need a quick forecast to discuss with a client. Instead of quoting a budget without its assumptions, write down the expected click price and each stage of the funnel. Changing one stage then updates the whole plan.

How to calculate it

1. Divide the budget by cost per click to estimate clicks.
2. Multiply clicks by the lead conversion, then leads by the sales conversion.
3. Divide advertising spend by expected customers to find advertising cost per customer.

Inputs and formulas

Copy these lines into Sumico or use the interactive example below. Decimal values in expressions use a dot.

# Advertising plan
budget = $3000
cpc = $1.50
leadRate = 5%
saleRate = 20%

clicks = budget / cpc
leads = clicks * leadRate
buyers = leads * saleRate
Ad cost per buyer: budget / buyers

Read the result

The plan yields 2,000 clicks, 100 leads and 20 customers. The $150 per customer covers advertising only. Keeping the assumptions beside the answer makes the forecast easier to challenge.

The calculation in Sumico

Change an assumption

Change cpc = $1.50 to cpc = $2. The same budget now buys 1,500 clicks, producing 75 expected leads, 15 customers and $200 of advertising spend per customer.

Assumptions and limits

The conversion rates and click price are editable assumptions, not benchmarks or a promise of results. Expected counts can be fractional. This is not fully loaded CAC: creative production, sales salaries, agency fees and other acquisition costs are excluded. Zero customers makes cost per customer undefined.

A common question

Is advertising cost per customer the same as CAC?

Only if advertising is your entire acquisition cost. For fully loaded CAC, add the other acquisition expenses and use a consistent customer cohort and period.