Which budget hits the lead target eight months in ten, and what do the extra points cost?
A lead target of 1,000 at $2.60 a click and a 6% click to lead rate. The sheet says 45,000 gets there with 38 to spare. Across 20,000 futures 45,000 hits the target in 56 in 100 runs, and 80% odds takes 50,000.
Marketing Starter Monte Carlo Pro engine
After you install, this is the model to open.
What spend gives 80% odds of hitting the lead target?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
This one runs on a Pro engine, and every free install includes five full-quality runs on your own numbers, shared across all five Pro engines rather than five for each. After that, Pro is $199/year.
What it does
A lead target of 1,000 for the month, a cost per click of $2.60 and a click to lead rate of 6%. As typed, 45,000 buys 17,308 clicks and 1,038 leads, 38 over the target, so 45,000 is the budget most people would sign. 50,000 shows 1,154 leads and 55,000 shows 1,269. Click Run with cost per click and the click to lead rate as three-point estimates, $2.10, $2.60 and $3.40 for the click and 0.045, 0.06 and 0.075 for the rate.
The seed is set to 7 and the trials to 20,000 so your first run reproduces these figures exactly. Leads against the target at 45,000 come back with a mean of 27.5 and a median of 21.2, and 45,000 hits the target in 56 in 100 runs. The 38 to spare on the sheet is a coin toss. At 50,000 the mean is 141.6 and the median 134.7, the fifth percentile is -92.3, and 50,000 hits the target in 82 in 100 runs, so 50,000 is the spend with at least 80% odds.
At 55,000 the median is 248.2 and the target is hit in 95 in 100. Read the three together and the price of odds appears: the first 5,000 buys 26 points, the next 5,000 buys 13. The three candidates share one draw of the click cost and one of the rate in every trial, so the difference between their readings is the spend alone. The tornado is a near tie: the click to lead rate leads at 0.70 with 52% of the spread and cost per click is at -0.68 with 48%, so a landing page test and a bid test are worth about the same.
Second run: if a month of data can hold the click to lead rate between 0.055 and 0.07, narrow that draw in the Risk Analysis panel and rerun. The odds at 45,000 rise, and how far they rise is what the landing page test is worth in budget. What the model cannot tell you: cost per click is held flat as spend rises, when the next 5,000 usually buys dearer clicks than the first, so the odds at 55,000 are a little generous; the rate is one draw for the month, not a draw per campaign; a lead is counted, not qualified; and the target is a line someone chose, not a number the market cares about.
To make it yours, put in your own target, the click cost and lead rate from your last three months as a low, likely and high, and three budgets you could actually ask for, and set the same two ranges on the draws in the Risk Analysis panel.
The model
It arrives on a tab called Template: Spend With 80% Odds, carrying these columns:
- Lead target for the month (leads)
- 1000
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
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- What CPA will your ad budget actually buy?PPC Campaign Planner
Every model like this one, and the method behind them: Monte Carlo simulation.