If we had a dollar for every time someone asked us, “how much should we spend on advertising?”, we would have a pretty sweet advertising campaign. In all seriousness, most people we interact with will benefit from advertising their business, but that’s too vague, right? There are many items that need to be in order for a business to start considering advertising. If your product isn’t sound or your sales funnel is a mess or you simply cannot take on new business at the moment. (applause for you if this is the case) We will walk you through how to answer that age-old question of how to create an advertising budget. This budget will be focused on solely online advertising which includes Facebook, Google, TikTok, and more.
What are your goals?
The first question we typically ask when someone comes to us seeking advice is, “what are the goals of your business?”. Depending on the stage of the business these goals can vary substantially. New business looking to gain market share? Great, we are going to have to spend quite a bit of cash to get there. Just need more leads to fill up a few afternoons next month? Wonderful, we can be a lot more efficient with your money. Understanding your goals helps you start to build out a budget.
How can you build the right budget?
In the former situation in the previous paragraph, knowing how much you need to spend in order to gain market share can be tricky, but not impossible. Depending on the size of an area you’re trying to impact will make that budget fluctuate a lot. The main factors you need to understand are your cost per acquisition (or how much you’re willing to pay to get one lead/sale), lifetime value, conversion rate, and main goal (increase sales, keep sales steady, reduce costs). Understanding these four items will help you determine how much you need to spend.
Can you take on more business?
After the crazy logistical nightmare our globe has gone through the past 2 years / is going through currently, production times are a lot slower. Staffing is short. And consumer behaviors are changing due to economic hardships. These are all very important factors to consider when looking at your business model. If your production line can not create products fast enough or you are so short-staffed that your services are booked for the winter, advertising from a return aspect just doesn’t make sense. You could look to improve your overall image with an awareness campaign, but that can put more strain on the business.
Is your timing right?
Understanding the capacity of your team is important, but understanding the timing of your product/service is even more so. We believe in complete transparency with our clients and consultations. Sometimes, the money that you’re looking at investing into advertising can be used better elsewhere. Paying to play the game can get expensive and that $2,000/month can be reinvested elsewhere to make more of an impact. At the end of the day, you need to do what’s best for your business and getting outside advice can help push you in the right direction.
These items will help determine how much you should be spending or shouldn’t be spending. All things considered, ensuring that your strategies are taken care of professionally, we highly recommend looking into a provider like ourselves or other agencies in the area (there are some great ones). If you’re against working with an agency, however, YouTube is a great place to learn. Otherwise, our doors are always open for a free consultation to evaluate your goals and objectives here.
Who is Finden Marketing?
Finden Marketing is an award-winning Marketing agency headquartered in Duluth, Minnesota. Finden specializes in helping new and established businesses connect to Gen Z & Millennial demographics using out-of-the-box ideas. With a core belief that marketing shouldn’t cost an arm and a leg, Finden Marketing boasts prices that businesses can actually afford and offers an entire marketing team for $3,000/month. Our team offers a wide range of services, including PR, Branding, Content Creation, Paid Media, Graphic Design, and Web Development.
Thanks for reading how to create an advertising budget! To learn more about Finden Marketing, check us out here, or visit us at our office in Duluth, Minnesota. Make sure to stay in touch with us: Facebook | Instagram | LinkedIn | Website
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