How much advertising budget should you start with?

There is no set number for a budget.

There isn’t even any rhyme or reason for a specific amount that should be spent when discussing the budget for a campaign. What counts is just how the budget will be distributed to the channels required for the business in question to shine.

Advertising budgets are usually the first topics discussed when coming up with a campaign to elevate a business from one level to the next. It can’t be at the minimum amount required, nor can it have all the budget. It needs to be focused, and it needs to have a plan in order to generate leads and engagement wherever that may be.

There are many variables from market to market too; you don’t want to invest part of the budget in an area where potential customers will barely be present at. Make it count, make it relatable.

But make sure that it’s budgeted the right way, for the right types of media.

Work Backwards

There are some simple calculations that can help to decide the budget, as a business you need to have a good idea of how much you are willing to spend to acquire a new customer, this will depend on factors such as profit margins, lifetime value of a customer. Once you have worked out what is an acceptable price to acquire a new customer, work out how many you would really like to acquire over the duration of your campaign. Multiply these two numbers and it will give you a good place to start, for example, if I am willing to pay £10 to get a sale and I’d like 100 sales a month, a realistic budget would be £1000 per month (you may need to adjust this based on results later on).

What can Help?

Coming up with a realistic target CPA can be difficult, thankfully there are some tools that can help.

Google Keyword Planner is one method of learning just what could be relevant. The tool gives you an overview of what keywords would be relevant, and what the cost per clicks could be too. Using this and your conversion rate from the website of the business, you will be able to calculate how many clicks you will need to earn a conversion. From this, you can multiply this to the CPC, to give yourself a forecasted cost per lead/purchase.

You can then do some rough calculations about current conversion rates on your website to know roughly how many clicks you would need to get a conversion.

Social Media

However, when you are considering the budget, one of the main attributes is to consider the minimum daily spends that each channel has.

While Google Ads doesn’t have a minimum spend, Facebook, Instagram and Twitter do, so you need to consider just what adverts will be in your campaign throughout its lifetime.

For example, LinkedIn recommends to spend a minimum of £8 per day for a campaign, so if there are 2 audiences that you have separate messages for, that will be £16 per day, at the minimum. So consider just how often, where, and when these ads will be distributed, otherwise the budget you’ve been given may spiral.

Organic social, podcasts and blogs can also be amplified through these channels at no extra cost, so it is worth remembering that when making your plan.

Timing is Everything

As we’ve said at the start; there’s no set amount as to what should be spent on a campaign.

As long as there’s been clear communication between your team and the business in question you’re trying to help, you will be able to generate an effective campaign.

Create a test campaign; feel the waters so to speak. See if certain images and copy make an impression.

Then once you have an idea, spend the money where it counts; look to where the audience in question is, and make the advertising relatable. That’s when you can build up an idea of how much budget will be required.

Money isn’t everything, but the timing and relatability are when it comes to a successful campaign.

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Accounts Team | Distract

The Accounts team at Distract seeks to manage clients in the most effective way by harnessing every opportunity to pull together the agency’s diverse departments to deliver.

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