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So, you’re ready to take the plunge into the world of advertising. Congratulations! But you might be wondering, “How much should I actually spend?” It’s a common question, and honestly, there’s no one-size-fits-all answer.
This guide will help you determine your ad budget – based on the 100s of clients I’ve served each year…mostly small businesses and startups just getting into advertising.
Let’s start with a few FAQs and then I’ll share my recommendations.
As always, you can reach out to me directly, and we’ll discuss your specific needs. My preference is always act now, strategize, then refine. It’s the quickest route to results.
Advertising Budget FAQs
With $500, what results can I expect from Google Ads (PPC Ads)?
With a $500 monthly budget, you can expect to generate some initial traffic and potentially a few leads or conversions.
However, it’s important to set realistic expectations.
$500 may not be sufficient for large-scale campaigns.
You can use this budget to test different ad variations, refine your targeting, and gather valuable data to optimize your campaigns for better results in the future.
Can I make sales within the first month of advertising?
It’s possible to make sales within the first month of advertising, but it depends heavily on various factors:
(1) Your industry: Some industries have shorter sales cycles than others.
(2) Your product/service: High-ticket items or services may take longer to sell.
(3) Your campaign setup: Effective targeting, compelling ad copy, and a well-optimized landing page are crucial.
(4) Your competition: If your industry is highly competitive, it may take longer to see significant results.
How many leads will I get with a budget less than $1000?
The number of leads generated will vary greatly depending on several factors, including:
(1) The quality of your ads and landing pages.
(2) The cost-per-click (CPC) in your industry.
(3) Your campaign optimization efforts.
(4) With a budget under $1000, you might expect to generate a handful of leads per month. However, focus on improving your campaign quality to maximize your return on investment.
Should I use Google Ads, Facebook Ads, or some other social media platform for my first ads?
The best platform depends on your specific business, target audience, and marketing goals.
(1) Google Ads: Ideal for businesses that rely on search traffic and want to reach customers actively looking for their products/services.
(2) Facebook Ads: Effective for reaching broad audiences, building brand awareness, and targeting specific demographics and interests.
(3) Other platforms (like Instagram, LinkedIn, etc.) – Consider platforms where your target audience is most active.
Understanding the “Blank Check” Problem
Many first-time advertisers find themselves at a loss when asked about their advertising budget.
My first two questions to prospective clients is, “What’s your website? What’s your ad budget?”
The first question is easy.
The second, harder.
They might feel pressured to give a big number, but the truth is, they often don’t have a clear idea of what’s realistic or achievable.
To help paint a picture of what’s possible, let’s look at advertising targets.
The goals – and see how your goals impact your budget.
How Goals Impact Your Ad Budget
If you just want to get more eyes on your website, you can probably get away with lower-cost strategies like social media ads or display ads.
But if you’re after highly specific traffic, like people searching for exactly what you offer on Google, expect those costs to climb.
If you’re aiming for something specific, like a direct sale, be prepared to invest more. It’s all about finding the right balance between your budget and your desired outcomes.
Now, if your goal is to actually get leads – like email sign-ups or people filling out a contact form – you’ll need to up your game. This usually means more precise targeting and really high-quality ads.
Think about it: you want those leads to be valuable, right? So, you’re going to pay a bit more to get them.
Just remember to keep an eye on how much each lead is costing you to make sure you’re getting a good return on your investment.
Things get even pricier when your goal is to make straight-up sales. You’re going after customers who are ready to buy, and that usually means higher costs per click.
It’s like fishing in a smaller pond – you’re targeting a smaller group of people, so it’s going to cost you more to catch them. That’s why focusing on your Return on Ad Spend (ROAS) is key. This tells you how much money you’re making for every dollar you spend on ads.
The bottom line is this: The broader your goals, the lower your costs will likely be.
If you’re aiming for something specific, like a direct sale, be prepared to invest more. It’s all about finding the right balance between your budget and your desired outcomes.
Things get even pricier when your goal is to make straight-up sales. You’re going after customers who are ready to buy, and that usually means higher costs per click.
The Importance of Budget Setting
- Goal Setting: Your budget directly influences your marketing goals. Are you aiming for brand awareness? Lead generation? Direct sales?
- Campaign Planning: Your budget determines the scope and scale of your campaigns. Will you run social media ads, Google Ads, or explore other channels?
- Return on Investment (ROI): Your budget is crucial for tracking your return on investment. You need to know how much you’re spending to acquire each customer.
See Also: How to Determine the ROI of Your Content Marketing
How Much Should I Spend On Advertising?
By now, I think you’ve seen the span of what’s possible when determining your first ad budget.
There are a few more variables to consider.
Factors That Influence Your First Advertising Budget
- Industry: Advertising costs vary significantly across industries.
- Competition: Highly competitive markets often require higher ad spend.
- Marketing Goals: As mentioned earlier, your budget will depend on what you hope to achieve.
- Target Audience: Reaching specific demographics or niche audiences can impact your costs.
- Advertising Channels: Different channels have different pricing models (e.g., cost-per-click, cost-per-thousand-impressions).
Tips for Determining Your Advertising Budget
- Start with Your Business Goals: What are you trying to achieve with your advertising? Increased website traffic? More leads? Higher sales?
- Research Industry Benchmarks: Look at what other businesses in your industry are typically spending on advertising.
- Consider Your Resources: What is your overall marketing budget? How much can you realistically afford to allocate to advertising?
- Start Small and Scale: Begin with a smaller budget and gradually increase your spending as you gain experience and see results.
- Track Your Results: Monitor your campaigns closely and track your key performance indicators (KPIs) to understand what’s working and what’s not.
Common Budget Ranges (for First-Time Advertisers)
Small Businesses: $500 – $2,000 per month
Mid-Sized Businesses: $2,000 – $5,000 per month
Larger Businesses: $5,000+ per month
Remember: These are just general guidelines. The best way to determine your advertising budget is to carefully consider your unique business needs and goals. I’ve put together a full pricing guide to show how much leads and traffic cost per industry. Check it out.
Don’t Be Afraid to Ask Questions
If you’re unsure about how much to spend, don’t hesitate to ask me directly. Ican help you determine a budget that aligns with your business objectives and provides the best possible return on your investment. Smash that little button below to send me a message.
For general questions, drop a comment down below.
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