How Much Should I Spend On Marketing?
- Companies spend between 3-19% of revenue on marketing
- Newer companies (1-5 years old), seeking brand recognition, often commit 12-20% of gross revenue
- One way to calculate adspend is to aim for 5-10% of anticipated revenue from a project (see next FAQ, ‘How Do You Calculate My Facebook Adspend?’)
- The CMO Survey is a good indicator of marketing industry trends (US-based)
- According to Campaign, The Dentsu Aegis Network CMO Survey 2018 revealed that “At least six in 10 marketing chiefs globally are expecting growth in their budgets in the coming year, with 73% of UK chief marketing officers predicting a boost.”
How Do You Calculate My Facebook Adspend?
To get Facebook’s suggested monthly adspend we calculate / estimate / agree :
- the target monthly revenue
- the average value of your transactions (customers / products / services)
- the number of transactions required to meet our target
- the number of enquiries needed to convert to transactions based on your conversion rate
- the number of clicks required to achieve the volume of enquiries
- the minimum reach and impressions your ads will need
We also work with you to define your ideal customers’ :
Given the above information, we arrive at the adspend that Facebook suggests, to achieve the reach / clicks required to result in the number of transactions we’re aiming for.
What's The Difference Between Facebook and Google Ads?
How Many Impressions Will My Facebook Ads Get?
How Does Google Ads Work?
- The user enters a query then Google determines if the keywords used are ones that any advertiser is bidding on – if so, an auction begins
- AdRank is the purpose of the auction: ads are ranked according to a mix of the maximum CPC (cost per click) their owner has bid, and Quality Score (relevance, number of clicks, and destination page)
- The price you pay is then calculated by comparing your ad’s AdRank to your competitors’ – the higher your AdRank, the less you pay
How Much Does Google Ads Cost?
- Google Ads is an auction that rewards businesses who have more relevant ad campaigns with lower costs and better ad placement.
- How your Google Ads budget is spent can be controlled using tactics like ad scheduling, geotargeting, and device targeting.
- The average cost per click is around £1-2 on the search network. The average CPC on the Display Network is under £1.
- The most expensive keywords in Google Ads and Bing Ads cost £40 or more per click. These are generally highly competitive keywords in industries that have high customer lifetime values, like law and insurance.
- In the US the average small business using Google Ads spends between $9,000 and $10,000 per month on their Google paid search campaigns.