How to Calculate PPC Target Bids for Healthcare Practices

Is your healthcare practice losing money on Google Ads? Are your ads performing at a profitable level?

This page can help you find out what you should be spending on pay-per-click (PPC) bids. After answering the four questions, use the formula to calculate your target bid. More advanced formulas are below with different scenarios we have seen in our years of experience with healthcare practices.

If you are concerned you are spending too much on Google Ads or an PPC campaign, reach out today and we can help.

How to Calculate PPC Bids for Medical Practices

What is a Target Cost Per Click (CPC)?

Target CPC refers to the amount you'd like to average for each click in your pay-per-click (PPC) marketing campaigns. Most advertising platforms run PPC campaigns including Google Ads, Facebook Ads, BingAds, etc.

How do I calculate the lifetime value of a patient?

Calculating the lifetime value of a patient can be challenging for some medical practices. Each practice needs to take into account their specific patient journey. If costs at your practice widely vary from patient to patient, you’ll need to get a little creative to best guess. 

Lifetime value of a patient is the average amount a patient brings in over their lifetime. 

Calculating Patient Lifetime Value depends on the specifics of your practice. Here are three examples to help you calculate your lifetime patient value. 


Example 1. Basic Formula (e.g. Urgent cares)

Patient Lifetime Value = Avg. Appointment Value x Avg. Visits 


Example 2. (e.g. dentists, general practitioners)

Patient Lifetime Value = Avg. Appointment Value x Avg. Visits per Year x Avg. Years


However, things get more complicated for many practices. 


Example 3. (e.g. orthopedic surgeons, plastic surgeons)

If your patients can be best understood divided into two main categories, a lower yield patient that visits but does not get a procedure, and a higher yield patient that visits and gets a procedure, it will benefit you to break them down. For example, a low yield patient with 2 $150 appointments makes up about 75% of your patients, and a high yield patient with 4 $150 appointments and one $2,500 procedure make up 25% of your patients for a lifetime patient value of $1,000. 

Low yield patients make up 75% of clients.

2 x $150 = $300

High Yield patients make up 25% of clients.

(4 x $150) + $2,500 = $3,100

Average patient value = $1,000

This page can help you find out what you should be spending on pay-per-click bids. After answering the four questions, use the 'Target Bid (maximum)' result on the right to analyze your spending. 

Examples answers have been provided if the data for your healthcare practice is unavailable.

How do I know how much we profit from each patient?

You may or may not have a good understanding of how much you see from each appointment, but perhaps you don’t. To find out how much you see, subtract expenses from revenue. 

Gross Margin = Revenue - Expenses


Gross Margin = $1,000 - $500 = $500


You could also calculate this as a percentage, use this formula:

Gross Margin = (Revenue - Expenses) / Revenue



Gross Margin percentage = (1,000 - 500) / 1,000 = 50%


The total margin is calculated by subtracting total expenses from total revenue and dividing by total revenue.

Q. I’m not sure of my expenses. Can I estimate how much patient margins my practice sees?

A. Yes! Absolutely. Most practices we speak with see between 20-60% margins. A reasonable guess can be made in this range. An average we hear most might be 40%. 

How much should I pay in marketing or advertising for a new patient?

This one sounds tricky, but it’s not! You’ll want to pay less than you receive. After finding out how much your practice sees after expenses, you’ll want to decide how much you’d pay for a patient. Most of these patients are new, and will likely be coming back. 

Pick a maximum amount you’d be willing to pay to get that patient for life. Your competition is also bidding in this auction, has similar margins, and will likely be bidding against you accordingly. 

Pro Tip: After calculating the max amount you’d be willing to pay for a new patient from ads, tell your marketing team that if they can hit that goal, the budget for ads becomes virtually limitless.

How do I find our how many visitors on my website book an appointment?

Finding out what percent of website visitors book an appointment is most commonly done with Google Analytics. If you have a website, the person or team who built it likely enabled Google Analytics to understand how your website visitors are using your website. 

In Google Analytics, this number is often measured by the metric called 'conversion rate'. Look up your conversion rate in Google Analytics or ask your marketing team.

What do I do next?

You have two options.

First, you can become a doctor-marketing expert hybrid if you dedicate yourself to learning this over the next few years. IF you choose this path, we want to help you. Sign up for our email newsletters (at the very bottom of the page) and follow us on LinkedIn and Facebook. Koda provides free resources and website audits to help you navigate the world of digital marketing.

Or, you can focus on your job - taking care of patients - and let us guide your practice to be the leader in your market. We use data-driven marketing to get results - so you’ll know exactly how much of an impact we’re making.

At Koda Digital, we help medical practices grow by getting the most out of Google Ads. Our average client saves 31% in just the first 60 days.

Book a free consultation by contacting us now.