The first $20 you spend on advertising is going to be the hardest. That’s because you’re likely to get only 2-5 leads from it. After that, the numbers start getting higher.
However, when you get leads, you’ll notice that your conversion rates will also go up. You’re going to convert 20% of your leads, but only 5% of your leads will be profitable customers. So, even if you spent $200, you won’t actually gain anything.
So the question here is how to spend your ad budget. How much money can you really expect to get back from an ad campaign?
STEP 1: Set Up Goals
Your first goal should be to drive traffic. Your next goal should be to convert the leads you got. Once you’ve done that, you can decide if you want to invest in retargeting ads to convert leads that were generated from your initial campaign.
STEP 2: Split Your Budget Between Types Of Traffic
If you look closely, most advertising budgets are divided into two types of traffic. The first is social traffic. You’ll see lots of examples of Facebook Ads or Pinterest Ads. While social traffic does a lot of things, they’re very expensive and don’t convert well. It’s also why they have a limited life span, so you’ll probably only see the results from your ad in a couple weeks.
The second type is direct traffic. This refers to paid ads on sites like Google AdWords, Bing Ads or Yahoo Search Marketing. While these can convert, the benefit of using them is their longer lifespan. They’ll give you some results for months, which means you’ll get to keep reaping the benefits of your ad over a long period of time.
The goal here is to split your budget between direct and social traffic. Social traffic is more expensive but doesn’t last long. On the other hand, paid traffic lasts much longer, but it doesn’t generate as much profit for you. Therefore, you’ll want to keep about $50-100 of your budget dedicated to direct traffic.
STEP 3: Optimize Your Budget For Each Goal
In order to increase the number of leads that you get from your ads, you can optimize your budget to include keywords, bidding and more. The main difference between optimizing for traffic and optimizing for conversions is the timeframe of your ads.
Traffic should be set to run forever, while conversions can be optimized per week. You’ll want to set your bids high for traffic. As long as your cost-per-lead is lower than your competitors’, you should keep running ads. However, once you’ve set your budget to run for a few weeks, you can start increasing your bids to target more specific terms and keywords.
STEP 4: Create A Systematic Schedule For Your Ads
Once you’ve set up your budget and optimized your traffic, it’s time to create a schedule. You should create a schedule based on time of day, day of the week, month or year.