How much should you spend on digital advertising?

For a digital marketing agency, there are some questions that keep coming up. I’d like to use this blog to give a clear answer. Probably one of the most frequently asked questions is – of course – about budgeting: how much should you invest in your digital marketing campaign? Here’s what you need to keep in mind.

Step 1: what’s your goal?

The most important question is of course: what’s your goal? A goal needs to be defined in a measurable way. If you’re an e-commerce your end goal is to sell more, but you can use funnel thinking to set goals in the steps before that: how many people should add products to their cart; how many people should visit your site? How many people should see your Facebook post? How many people do you want to reach?

“The most important question is of course: what’s your goal?”

The more “top funnel” your goal, the easier it will be to use available benchmarks in order to calculate what you should spend. Lower down in the funnel, down to actual sales, these predictions get more difficult: every brand and product is unique. With so many variables, there’s only one thing left to do: test, improve, test again.

Step 2: Start at the very top

If you’ve done advertising before, you probably know what the cost-per-conversion is. If you haven’t, your safest bet is to think top funnel: how many people do I want to reach in how much time? Try to limit yourself to your core audience and aim to reach them more than once. Additionally, you should ask yourself how many people you’d like to engage. Realistically: what percentage of people would engage with your content? Reach and engagement benchmarks are available per sector, so should these can be a good start to calculate your advertising budget.

Step 3: Rome wasn’t built in a day

With advertising platforms such as Adwords and Facebook becoming more and more artificially intelligent, you’ll see your ads performing better and better over time. I’m talking weeks in most cases. So don’t panic if your ad isn’t performing great in the first hours or even days: it takes a while. Only after 3-7 days you’ll see your cost metrics stabilise more or less and you can start to draw conclusions on every step of your funnel.

Step 4: back to the drawing board

Now that you’ve done your first campaign, you can finally let go of benchmarks and use your own data. You know how well you did on all cost metrics down the funnel in your first ad campaign, so you can make an estimate for your following campaigns. And, of course, try to improve.

We can help…

We’re addicted to creating and improving ad campaigns and generating online driven revenue for your company. We have a special trial offer and a bunch of successful cases which we’d love to share with you over coffee. Interested? Give us a shout!

Bert Gybels
bert@manversusweb.com

Digital marketeer and strategist with a keen desire to make your brand grow fast online.