The Funnel of Your Ads Budget
One factor we haven’t talked about is what is the sales cycle of your potential client/product. This cycle can tell us how often someone might need to see your ads before they decide to pull the trigger. This can also drive costs up.
When you have a longer sales cycle and need more touchpoints, you are going to need more campaigns upstream in the buying process and you are going to want to be able to A/B test the ads in those campaigns. Let’s break that down.
Campaign #1 focuses on point #1 in the cycle of buying, you want to test different messaging and creativity at point #1, so this needs to be its own campaign. Then you have points #2, #3, and so forth.
You get the point (pun intended), you will need several campaigns, and when you have several campaigns a couple of things happen.
First, you need enough data to make statistical decisions on these campaigns. The second that happens is the algorithms need enough data to make decisions on how to improve your campaign using their own machine learning.
This also leads to the fact you might have several different types of services to market and with that, you need a funnel for each type of product or service that you have. You can quickly see how simple budgets do not get you the answer and marketing that you need with your ads funnels.
When dividing up the ad budget you do have a quick and dirty ad budget strategy, you need to take 70% of your budget and market towards TOF top of the funnel or those who do not know who you are. Then take the other 30% and put it at the BOF bottom of the funnel or remarketing. This is a common mistake we see in that all money goes toward just lead generation not understanding that on average most people don’t convert the first time they come to a website.
Okay one more point, using just one platform to create that funnel is a mistake. there are all kinds of platforms that do re-marketing and an omnichannel approach to your advertising budgets will make you more successful. Not all platforms are created equal for remarketing.
Deciding Ad Budgets Within Platforms
We talked about it above in dividing budgets by your funnel of purchase or the number of products/services that you have but there are also metrics within each platform to consider. We hinted at it above on the math. Let’s talk about those specific metrics.
What Is “Impression Share”?
Impression share is shown often when your Google search ads are shown in relation to how much traffic is available. You don’t need 100% to win at this. Maybe you don’t want to grow that fast and you only need to show a certain amount. But maybe you are a startup with investors and being the best is what you need. This is where subsections of impression share matter such as top impression share and showing at the top of results.
This just shows you the opportunity but your conversion rate and CPC need to be in line to ensure you are producing results. This can be an ego measurement if you are not careful to pay attention to those two numbers because just showing up to the search engine results is only part of the funnel. We won’t get into all the metrics you need to pay attention to in Google ads to be successful but we did write a blog post on that.
Social Ad Budgets
How Is Audience Size Determined?
We talked about this above, but we just want to give a little insight here. Audience sizes are determined by the criteria let’s say that Facebook ads or any native ads, display ads, Linkedin ads, and so forth set as what they determine goes into that audience. We have no idea of the legitimacy of those audiences until we start running ads and see if they have nailed it right. Their ability to gather audience information is constantly changing due to social and governmental pressures.
With the advertising campaigns becoming less and less able to track, we need to ensure we pay attention to advertising platforms that can contextually get us to audiences. Contextual just means the content on the pages has to do with the type of industry we are in. Think back to industry-relevant magazines. When we talk about advertising budgets and audience sizes we are now going into the scope of the internet and how many websites exist that are about your industry. This is a very different subject.
Low Budget vs. High Budget Advertising
Let’s wrap it up with low advertising budgets and high advertising budgets, you can make a strategy with both. You just need to adjust your expectations to perhaps just bring brand awareness if you have a much lower budget. There are strategies such as running video campaigns where we can get you in front of a very large audience for a very low cost.
Saying that you shouldn’t advertise because you have a low budget is like saying I don’t want to run a business, everyone needs to market. We did a podcast on the importance of always marketing. You just won’t have the data to make statistical decisions quick enough. You won’t be able to move quickly to scale your marketing because the data is not there.
Alternatively, with large advertising budgets, you can quickly analyze data to figure out what part of your advertising funnel is broken and make decisions quickly in order to scale your marketing.
You can also spread out and market more products and services with large budgets and figure out which product or service your audience is more likely to want to buy first and then upsell them later with your email marketing. It’s like when growing any business the more time and money you have the quicker you can grow but you don’t always want to grow quickly.
Advertising Budgets Once Again Require Time and Effort
If you are getting your ad agency blurting out quick advertising budgets without thinking through everything above, congratulations you just got sold on how easy digital marketing is, when in fact it’s not. It takes highly skilled individuals who are able to ask good-quality questions and troubleshoot complex questions. There is a reason we were named the best advertising agency in Indianapolis.