How to decide your advertising budget
Posted: Wed Jan 22, 2025 4:51 am
Generally speaking, many e-commerce owners will set their marketing budget to be between 15% and 20% of total revenue, and part of it is digital media advertising budget. However, since each company's industry category and development stage are different, this is only an approximate ratio and not a fixed rule. In terms of digital advertising, it is recommended that continuous optimization and testing is needed to ensure that every penny invested can achieve the expected benefits. I will share with you my strategies and judgment logic when operating LAP advertising, hoping to help everyone be effective. Configure every cent of your budget. I have to say this first, because the genres of advertising are different. If there are other better ways, everyone is welcome to communicate together. .
First, understand what your advertising goal is. If the goal is to increase sales, you can use the basic e-commerce formula as the calculation logic (turnover = traffic * unit price * conversion rate) to set the expected sales Based on the target amount, and then through the customer unit price and conversion rate currently displayed on the official website, you can bahamas mobile phone number list calculate the required website traffic. EX: If the expected target monthly turnover is $5,000,000, the customer price is $2,000, and the website conversion rate is 2.5%, the required traffic per month is 100,000/person, and the required traffic per day is 3,333/person. If all this traffic is brought in by advertising, how much will it cost? You can multiply the required traffic number by the click cost of the ad. EX: If the cost-per-click (CPC) of the advertisement is 15 yuan, the required daily advertising expenditure is, 3,333 * $15 = $49,995. Does such advertising cost justify marketing expenses? Of course, in actual situations, you can first deduct natural traffic, recommended traffic, social traffic, direct traffic, etc., and then calculate how much paid traffic is needed to achieve the daily target from the existing basic traffic.
2. Advertising strategy
1. The ratio of new customer traffic to remarketing ads is 3:1 in normal planning. The purpose is to expand the opening flow at the top of the funnel and avoid spending too much budget on remarketing ads (but this may also vary depending on the industry category and market. (Subject to change according to different activities.
First, understand what your advertising goal is. If the goal is to increase sales, you can use the basic e-commerce formula as the calculation logic (turnover = traffic * unit price * conversion rate) to set the expected sales Based on the target amount, and then through the customer unit price and conversion rate currently displayed on the official website, you can bahamas mobile phone number list calculate the required website traffic. EX: If the expected target monthly turnover is $5,000,000, the customer price is $2,000, and the website conversion rate is 2.5%, the required traffic per month is 100,000/person, and the required traffic per day is 3,333/person. If all this traffic is brought in by advertising, how much will it cost? You can multiply the required traffic number by the click cost of the ad. EX: If the cost-per-click (CPC) of the advertisement is 15 yuan, the required daily advertising expenditure is, 3,333 * $15 = $49,995. Does such advertising cost justify marketing expenses? Of course, in actual situations, you can first deduct natural traffic, recommended traffic, social traffic, direct traffic, etc., and then calculate how much paid traffic is needed to achieve the daily target from the existing basic traffic.
2. Advertising strategy
1. The ratio of new customer traffic to remarketing ads is 3:1 in normal planning. The purpose is to expand the opening flow at the top of the funnel and avoid spending too much budget on remarketing ads (but this may also vary depending on the industry category and market. (Subject to change according to different activities.