How Much Should You Spend On Your Ad Campaign?

This is a very common question, so thought a dedicated FAQ post would work here…

So how much should  you spend on your advertising?

The short answer: You should spend less than you make 

It’s really as simple as that when it comes down to it. How much are  you willing to spend to get a new customer? If you make $5 per sale, then maybe you can spend $2.50 to get a new customer. How many new customers do you want, 100? Great, then you should  spend $250 and you’ll get those customers. Want 1,000  customers? Spend $2,500.

You get the picture.

Now what if you don’t have those numbers figured out yet or you want to run some branding or lead generation campaigns first before running a full 3 part sales campaign?

Run tests on customer acquisition and figure out how much it costs to acquire a customer and then ramp up when you hit the right profit margin. Also keep in mind that your customer will buy from you more than once if you’re doing it right (and depending on your business model). So that profit margin doesn’t have to be on their first purchase, but can be over the course of a year or their lifetime. That depends on your financial runway and how fast you need to make your money back to keep the business open.

This is more likely what you had in mind when you asked the question. So here’s an answer closer to what you were probably looking for:

If you want to just run lead capture (like with the contest) and test out what you think might work, then I would say start with $10/day budget and let it run for a week. If your account is new, Facebook needs to put it to work on collecting data on who the best people to show your stuff are. Then it can work its magic.

If you just want to run “brand awareness” then video views are your best bet, and I’d say to just run a $5/day promo on videos you do. Start with a 45-90 second “mission” type video that speaks to the audience and calls them out quickly in the beginning where they think “shit yes, this is for me.”

About the author Todd

Todd is the Founder and lead Evangelist of Growth Suite.