Hi there,
Thanks for reaching out!
Happy to give you some initial thoughts on figuring out advertising costs in Lisbon. It's a question we get alot, but the answer isn't a simple number. Honestly, asking for the "cost of advertising" in a specific city is a bit like asking "how long is a piece of string?". The real question isn't what it costs, but what you can afford to pay to get a profitable customer. The price of a click in Lisbon is far less important than the value of the person clicking it.
So instead of giving you a vague price list, I'm going to walk you through the framework we use to determine if any market, Lisbon included, is viable. It's a process that shifts the focus from cost to profit, which is the only thing that actually matters at the end of the day. We'll get into the maths of it and figure out exactly what your business can and should be spending.
TLDR;
- Ad costs in Lisbon are driven by competition for your specific audience, not just geography. Expect costs to be in a similar ballpark to other developed European countries.
- Forget asking "what does a click cost?". The only question that matters is "what can I afford to pay for a customer?". This is determined by your Customer Lifetime Value (LTV).
- The most important piece of advice is to calculate your LTV first. This single number dictates your entire advertising budget and strategy.
- Your offer is more critical than your ad spend. A weak offer will fail even with cheap traffic from Lisbon; a strong offer can be profitable even with high ad costs.
- This letter includes a fully interactive LTV calculator and other charts to help you figure out your own numbers and build a viable strategy for the Lisbon market.
We'll need to look at the myth of 'cheap' geographic traffic...
First things first, let's bust a common myth. There isn't really a "Lisbon price" for ads. Ad platforms like Google and Meta are global auctions. You're not bidding against other companies in Lisbon; you're bidding against every company in the world that wants to reach the same audience you do, who happens to be in Lisbon.
If you're selling B2B software to tech startups, you're competing with giants like HubSpot, Salesforce, and every other SaaS company targeting founders and developers in that city. Lisbon is a major tech hub, so that audience is highly competative and therefore expensive to reach. If you're selling handcrafted jewellery, your competition is different, but the principle is the same. The cost is dictated by the value of the audience you're trying to reach, not the city they live in.
That said, we can establish a rough baseline. Portugal is considered a developed country, so performance will be in a similar range to other Western European nations. Based on what we see across hundreds of campaigns, here's a very rough idea of what you might expect. These are just ballpark figures to give you a starting point.
| Objective & Market | Low-End Est. CPC | High-End Est. CPC | Est. Conversion Rate | Resulting Cost Per Acquisition (CPA) |
|---|---|---|---|---|
| Signups / Simple Leads (Developed Countries) | €0.50 | €1.50 | 10% - 30% | €1.67 - €15.00 |
| eCommerce Sales (Developed Countries) | €0.50 | €1.50 | 2% - 5% | €10.00 - €75.00 |
| Qualified B2B Leads (Developed Countries) | €2.00 | €8.00 | 5% - 15% | €13.33 - €160.00 |
As you can see, the ranges are huge. A €15 cost per lead might be a disaster for one business but an incredible bargain for another. This is why looking at cost in isolation is a fool's errand. It tells you nothing about whether the market is "viable". Viability is about profit. And to understand profit, you first need to understand value.
I'd say you need to forget cost and focus on value...
This brings us to the most important metric in your entire business, and the one that will definitively tell you if Lisbon is viable: Customer Lifetime Value (LTV). How much gross profit is one customer worth to you over their entire relationship with your business? Once you know this number, everything else falls into place.
The calculation is pretty simple. You just need three numbers:
- Average Revenue Per Account (ARPA): How much revenue you make per customer, per month (or year, just be consistent).
- Gross Margin %: Your profit margin on that revenue after accounting for cost of goods sold (COGS). For a SaaS business this is often high (80-90%), for an eCommerce business it might be lower (30-50%).
- Monthly Churn Rate %: The percentage of customers you lose each month.
The formula is: LTV = (ARPA * Gross Margin %) / Monthly Churn Rate %
Let's say your a SaaS business and you charge €100/month, have an 80% gross margin, and you lose 5% of your customers each month. Your LTV would be (€100 * 0.80) / 0.05 = €1,600. Every time you acquire a new customer, you can expect to make €1,600 in gross profit from them.
This number is your north star. It's the foundation of your growth strategy. To make it easier, I've built a little calculator for you. Play around with your own numbers to see what your LTV is. This is the first, and most important, step to figuring out your Lisbon budget.
You probably should define your maximum affordable cost...
Okay, so now you have your LTV. What do you do with it? You use it to calculate your maximum allowable Customer Acquisition Cost (CAC). This is the most you can possibly spend on sales and marketing to acquire a single new customer and still have a healthy business.
A good rule of thumb for a growing business is a 3:1 LTV to CAC ratio. This means for every €1 you spend on acquiring a customer, you get €3 back in lifetime gross profit. So, your maximum CAC is simply your LTV divided by 3.
Using our example from before with a €1,600 LTV:
Max CAC = €1,600 / 3 = ~€533
This is your budget. You now know you can spend up to €533 to get a new customer. Suddenly, a €50 cost per lead from a LinkedIn ad targeting a CTO in Lisbon doesn't seem so expensive, does it? It looks like an absolute bargain, provided your sales process can convert those leads efficiently.
We can take this one step further. If you know your sales conversion rate (the percentage of qualified leads that become customers), you can work out your maximum cost per lead (CPL). If your sales team closes 1 out of every 10 qualified leads (a 10% conversion rate), then your max CPL is:
Max CPL = Max CAC * Sales Conversion Rate = €533 * 0.10 = €53.30
This entire process transforms the conversation. You're no longer guessing. You've moved from a vague "what do ads cost?" to a powerful, data-driven "I can afford to pay up to €53.30 for a qualified lead from Lisbon, and my business will be very profitable if I do."
You'll need to find your audience's nightmare...
Now that we have a target CPL, the job is to find people in Lisbon who fit our Ideal Customer Profile (ICP) for less than that price. And the key to this is not demographics. "Companies in Lisbon with 50-200 employees" is a useless ICP. It leads to generic, ineffective advertising.
You must define your customer by their pain. What is the specific, urgent, expensive nightmare that keeps them awake at night? Your Head of Sales client in Lisbon isn't just a job title; she's terrified of missing her quarterly target because her team is buried in admin work instead of selling. Your ICP isn't a person; it's a problem state.
Once you've identified that nightmare, you can find where these people congregate online. Are they listening to specific podcasts like 'SaaS Club'? Are they in certain LinkedIn groups? Do they follow specific industry influencers? This intelligence is the blueprint for your targeting. For B2B, this often means LinkedIn Ads, where you can get incredibly specific. I remember one campaign we ran for a software client where we achieved a $22 CPL targeting decision-makers, because we focused on a very precise pain point they were experiencing.
This is far more effective than just blanketing "Lisbon" with ads and hoping for the best. You need to target the pain, not the postcode. A person with a problem in Lisbon is just as valuable as a person with the same problem in London or New York.
We'll need to look at your offer...
This is probably the single biggest reason campaigns fail, and it has nothing to do with ad costs. The number one factor for success is your offer. A brilliant offer can make expensive traffic profitable. A terrible offer will fail even if the traffic is free.
The most common failure we see is the "Request a Demo" button. It's a high-friction, low-value Call to Action. You're asking a busy person in Lisbon to give up their time to be sold to. It's an arrogant ask, and it's why conversion rates on these pages are often terrible.
Your offer's only job is to provide a moment of undeniable value, for free, that makes the prospect sell themselves. For a SaaS company, this is a free trial with no credit card required. Let them experience the product and feel the transformation. For a service business, it could be a free, automated audit tool, a valuable checklist, or a short, insightful video course. For our agency, it’s a free 20-minute strategy session where we audit failing ad accounts. We solve a small problem for free to earn the right to solve the whole thing.
A better offer dramatically increases your landing page conversion rate. If you can double your conversion rate, you have effectively halved your cost per lead. This is often a much bigger and easier lever to pull than trying to shave a few cents off your cost per click in Lisbon.
I'd say you need a solid plan to test the market...
So, is Lisbon a viable market? The answer is almost certainly yes, if you have the right product, the right offer, and the right maths to back up your strategy. It's not about the cost of a click; it's about the profit from a customer.
I've detailed my main recommendations for you below to put this all into practice:
| Component | Recommendation | Why it Matters |
|---|---|---|
| Mindset Shift | Stop asking "What do ads cost?". Start asking "What is a customer worth to me?". | This focuses you on profitability, the only metric that can sustain your business. Cost is irrelevant without context. |
| Your Numbers | Use the calculator above to determine your LTV. Then, calculate your Max CAC (LTV / 3) and Max CPL. | This gives you a hard, data-driven budget. You'll know exactly how much you can spend to acquire a lead and remain profitable. |
| Targeting | Define your Ideal Customer Profile by their 'nightmare' problem, not their location or demographics. Target that pain. | Pain-based targeting leads to highly relevant ads and better quality leads, making your budget go further. You'll attract people actively looking for a solution. |
| Your Offer | Replace any high-friction "Request a Demo" or "Contact Us" calls to action with a high-value, low-friction offer (free tool, audit, trial). | A better offer is the fastest way to increase your conversion rate, which directly lowers your cost per lead without changing anything about your ads. |
| Campaign Setup | Launch a small test campaign in Lisbon targeting your 'nightmare' ICP with your high-value offer. Optimise for conversions (leads, sales), not reach or clicks. | This provides a real-world test of your assumptions. You'll get actual CPL data from Lisbon that you can compare against your calculated Max CPL to determine viability. |
As you can probably tell, figuring this out properly involves a fair bit of strategic work before you even open an ad account. It's not just about pushing buttons and setting a geographic target. It's about deep work on your business model, customer psychology, and your offer.
Getting this framework right is the difference between burning cash and building a predictable engine for growth in any market you choose to enter. If you'd like an expert pair of eyes to help you calculate your specific numbers and build a detailed testing plan for the Lisbon market, we offer a free initial strategy session. We can walk through this together and map out a concrete plan of action.
Hope this helps!
Regards,
Team @ Lukas Holschuh
