You want to run a digital advertising campaign but you don't know how much you need to spend. If that sounds like you, you're not alone - Digital advertising agencies like This Side Up get asked this all the time. So how do you approach it?

You want to run a digital advertising campaign, but don’t know how much you need to spend?

If that sounds familiar to you then you’re in good company, as we get asked this all the time!

So how do you approach this?

Well, the answer is, “it depends” (sorry!).

There’s really no straightforward answer, as there are so many variables to consider. We’re not trying to avoid the answer, honest … it’s just that it comes down to your individual needs, business requirements and let’s be up-front about it now – what you are actually willing to spend!

So we thought it would be good to take you through the steps we went through for one of our clients to help them set a budget for a lead generation campaign using Facebook ads.

Who is your audience?

Seriously, who are they and what do you know about them? If you’re scratching your head a little trying to answer this, then you need to STOP RIGHT NOW DUDE and get it sorted!

Yes, we harp on about this, but without understanding who and where your customers are then you may as well go out on a street corner and hand out $20 dollar notes to everyone that walks past, as you’ll get better results doing that!

For our example, the client sells sports clothing to the plus-size female market. So they know exactly who they want to get in front of. Perfecto.

What is your advertising objective?

You really need to know what you want out of the money you’re investing, as that determines a lot of things such as where to spend it, what sort of content you need, types of banners and messages, landing pages, and how to set up the various platforms to make sure you have the best chance of achieving these objectives.

Here’s a solid list to choose from to get started:

  • Increase leads and enquiries
  • Increase online sales
  • Get bookings
  • Improve brand awareness
  • Increase website traffic
  • Grow your database
  • Improve user experience
  • Improve data quality
  • Increase page likes or followers

There are more, but that’s a pretty good start.

Our client’s primary goal is to grow their email database. They want to use this data to send email marketing communications with a view to turning them into paying customers over the long-term.

How are you currently measuring performance?

How will you know the campaign is successful, and what are the key metrics you will be looking at to work out if the money you spent was a good investment?

Here’s where you need to spend some time looking at Google Analytics, Facebook reports or perhaps one of the fantastic Digital Dashboards that we’ve built you!

For our client, we ran a lead generation campaign on Facebook to get sign ups to their email database. The key metrics and targets they were interested in looked like this:

Grow email database from 5,000 to 10,000 subscribers, within 3 months.

So that’s a really good objective, with a specific target date, and fully measurable. 5,000 is a lot of emails, so it may not be cheap to do – so the question is, how much will it cost to achieve this goal?

Establish your total and monthly budget

Ok, now the rubber meets the road – how much cash do you need to invest?

Truth is, you do not need to go full throttle to begin with – there’s really nothing wrong with testing the water first to get a good feel for things. Call it “an advertising tax”.

Let’s use our case study again as an example:

To start with, we ran a small test campaign to establish a benchmark cost per email. Plus our client wanted to test the quality of these emails over the first month to see how many converted to actual $ product sales.

We ran a campaign for 2 weeks and spent $1K as our pilot. At the end of the 2 weeks we calculated the average cost per email was $2.70, so we put a range of $2 – $4 in place to act as a buffer when competition increased.

So ongoing, this was straight forward for our client:

5,000 new database emails over 3 months using the highest cost per email of $4 = $20,000

For our client to achieve their goal they need to invest just under $7,000 a month.

On platforms such as Facebook, we don’t recommend drip feeding your budget for an objective like this. Objectives, such as brand awareness, might be better suited to run over a longer period of time, like 6 months. But this was what we did for this specific client.

Choose your channel

This client was happy to stick with Facebook as 70% of their audience are high users of this platform. We advised that if the frequency of advertising to this audience got too high, we would look at possibly adding in Google Display or Youtube.

The last thing you want to do with your audience is overdo it, you’ll just annoy them and they’ll switch off. You’ll also need to come up with lots of good ideas for ads that are creative, engaging and hit the mark with what your customers want. That’s why it’s always worth investing in good imagery and creative ideas at the start too, and it needs to be tweaked for different platforms as well. You don’t just slam promos and deals down people’s throat on Youtube, for example, you’ll need to have engaging video content that sparks interest.

So again, this is why it’s important to know who and where your customers hang out, what makes them tick, and what’s going to get their attention, and how to do that for the different channels.


Be prepared to make tweaks to your budget.

If you’re running across multiple channels and one stops performing, you’ll need to pause that channel and investigate why. If it ain’t working, and another channel is, then you should probably pull your money out of that and put it on one that is bringing in the results.

So long as you are aware that this could happen when you start, as you can’t afford to put all your eggs in one basket, and to be open enough to test things out across a few platforms initially, then monitor and refine as you go.

Back to our example one last time…

We’re half way through this campaign and have now got the average cost per email down to $1.40. For this particular client, in the competitive retail category, it’s a great result, especially when their average product value (APV) is $80.