This is probably one of the most commonly asked questions that we receive. You have claimed your business, registered with all possible and impossible platforms, claimed your business everywhere, and now ventured into paid advertising.
One of the first things to set up in your ad campaign would be the budget. But how do you know how much to spend?
The best way to optimize your spending would be to review the performance of other businesses in your chosen category, current trends, and, most importantly, the performance of your own company.
The latter is a challenge because you don’t have any paid data to analyze yet. If you are already working with someone who has experience in the field – great! If not, do not get discouraged. Yes, experience in the field definitely helps, but trends do change frequently, and advertisers who have run campaigns for years need to edit and tweak them constantly anyway.
The best plan to find your sweet spot in spending would be as follows:
- Approximate monthly ad spend based on your industry and company size.
This is your starting point. Yes, higher spend will result in more clicks, but not all clicks lead to sales. The next step is vital to see where your money is going.
- Install conversion tracking to measure all conversions.
Track every sale, form submission, phone call, download, or any other actions users take on your website. Also, track secondary conversions (such as time spent on site or engagement) to see what draws new users to your business.
- Monitor customer behavior
Are customers following the funnel? Is it easy for them to make a decision to connect with your business? Is there something on the site that prevents them from making a decision? Take the guesswork out of it. What may seem clear to you may not be as easy to understand for others. Analyze their behavior to find any inconsistencies.
- Adjust spending based on measurable metrics.
Now, when you run your ads for 2-4 weeks, it is easier to see what leads to customer engagement, sales, and subscriptions. It is easier to see where there is no return as well. Move your funds accordingly.
- Repeat
Do not forget about seasonality, world trends, and other important aspects that can change the behavior of your customers. Revisit your campaigns often to adjust budget, targeting, and ad assets.