So, you’re looking to take your business to the next level with paid marketing, right?
But how much do you need to spend on marketing, and which types of advertising should you spend your budget on?
There is a lot of guesswork in figuring out your advertising and business budget, and if you follow the wrong advice, you could end up losing a lot of money.
However, don’t worry. We’ve got your back!
In this post, you’re going to learn exactly how to set an advertising budget for your business. You'll also learn about advertising cost, types of advertising, and more!
Let’s dive in...
How to Create an Advertising Budget
To create an effective advertising budget for your business marketing, you need to understand what your goals are.
You may look to:
Reach a certain revenue goal for a certain product
Build partnerships and joint ventures
Increase overall web traffic and brand awareness
When starting any marketing, you need to have a 40,000-foot view of what it is you are trying to achieve and what results you want to see every month and every quarter.
Also, knowing where you are in your business journey can help you make better decisions with advertising.
Most businesses are either start-ups or established. Which one you are will dictate what types of advertising you are going to need. A start-up is often going to need different styles of advertising campaigns than a business that’s already established.
Outline Your Sales Funnel
The initial step to creating your advertising budget is knowing your sales funnel.
There are a lot of upfront costs required to generate sales. It’s important to understand what it takes to convert a prospect into a customer.
To do this correctly, you need to track the customer journey from the entry point of your funnel to the end, making sure every step in your funnel is measurable.
That will allow you to track how much money, time, and effort goes into each step in your funnel.
Having this knowledge will enable you to know exactly how much ad budget you have to spend to get a customer.
It’s also a good idea to review these data points regularly to spot bottlenecks in your sales funnel.
Analyze Your Competitors Marketing
Next, have a look at your competitors. How are they marketing? What platforms are they using? Facebook? Google PPC?
This will give you a clearer idea of where you should spend your advertising budget and how much you should be spending.
Competitor analysis will give you powerful insights that will shortcut your path to results by leveraging what’s already working and not working for your competitors.
You want to look at how long each of your competitors’ ads has been running.
Ads that have been running longer are more successful, so monitor long-running ads because they’re working!
It’s this type of information that will allow you to create winning advertising, and a positive ROI, every single time.
Know Your Perfect Customer
When advertising, you need to know exactly who you are trying to communicate with.
A big mistake a lot of businesses make is trying to target everyone, but this kind of broad targeting is going to spread your budget extremely thin.
You need to focus down into a narrow group of people who are suffering from a very specific problem.
Narrowing down to small groups will allow you to create more specific advertisements, solve more specific problems, and lower your advertising cost.
Measure Your Results
When creating your advertising budget, you need to track what marketing strategies are generating revenue for your business.
When you don’t have that tracking in place, you can’t review the effectiveness of your marketing, and if ad pricing is high, you risk losing money on marketing that’s not working for you.
If you’re advertising with Facebook ads, you can use their tracking pixel and conversion tracking to do this, or Google Analytics can also help you track your marketing results.
Decide Where to Spend Your Budget
Once you understand exactly who your perfect customers are and what’s working for your competitors, you need to choose your marketing channels.
You first need to know which platforms your audience uses regularly and then understand which of those platforms provide the biggest ROI.
Advertising platforms like Facebook ads and Google PPC are great methods of marketing your business, as they provide trackable results.
With Facebook marketing and Google PPC, you’ll be able to track each step of your marketing and see exactly what’s working and where it’s not working.
Set Goals
An important step in creating your advertising budget is setting result-based goals.
The fastest way to set goals is by asking yourself questions like these:
How many sales do we want to generate from Facebook ads?
How much revenue do we want to generate from Google PPC?
How many prospects do we want to generate from our content?
Setting strong goals will give you something to focus on and chase, but over time, as you become more successful with your ads, these goals will change.
Set Your Marketing Budget and Take Action
Now that you know how to set an advertising budget for your business, you can begin planning your marketing campaigns.
However, if you’d like help to create an advertising budget and successful ad campaigns, contact us today to schedule a free call.
We will help you get things set up fast!