Whilst there are many aspects of any type of marketing to get to grips with, one of the questions we get asked a lot is: “How much is a good budget for this campaign?”

I can completely understand the frustration when I answer with the dreaded words…”It depends”

It depends on a lot of things and it can be hard to pin down exactly how to reach the right answer.

Our approach is always to test.

We don’t know, our customers don’t know. All we can do is put our offer out to the marketplace and test. Test everything, but test slowly.

As business owners we can be very tempted to jump in with both feet as soon as something works a little, or as soon as we get impatient.

As with most things in business and life, it very seldom happens overnight. Ever heard of the 10 year over-night success? That is how it is with marketing too.

As an example, David’s family business spent £6000 in January of 2016 on Adwords. In February they spent £3000 and in December of 2016 Google only took £1278.21 from them. 

Now, keep in mind, David has not simply reduced the budget in order to spend less.

The reduction in ad spend goes hand in hand with tracking the results that come from it. So over the course of a year, the AdWords spend went down by around 75%, but their results increased dramatically.

Along with the reduction in spend on Google, the spend on Facebook has increased from £0.00 in November of 2015 to £967.46 in December of 2016.

The only way we could justify reducing the spend on Google, was to track the results in combination with an increase on Facebook ad spend, and then also compare the results of new landing pages and an entirely new website. (Three websites in fact, but more on that another day.)

When you first set out to do digital marketing, it can be one of the most frustrating things you ever try and do.

You are not only learning a new piece of software, with it’s own language and rules, but at the same time you are trying to work out what works best and where.

The massive reward is in sticking with it though. Take baby steps, especially with a new campaign. No matter how well you think you have planned your campaign, or how well you know your market, always focus on testing small, confirming the results, then testing more.

You need to be patient

I’ll give you an example of what happens when you are not patient.

We recently launched a new Facebook campaign for a client of ours. It was quite a complicated setup, spread over 24 specific geographic areas. Again, whilst we had big ambitions and requirements for the campaigns, we started by only spending £5/day in any area.

We needed to see how our very targeted audience responded.

After the campaign had been running for 12 days or so, we had a review with the client.

Even though we advised against it this early on in the campaign, we were required to double the budget on all the campaigns, as the business “needed to be everywhere”.

Whilst I completely understand the thinking behind this, I would still caution against simply doubling your budget in order to get better results.

It might seem like it is a lever you can pull that will get you quick results, it always pays to take a more measured approach.

From a section of our reporting dashboard, in the images below you can see a comparison on the reporting for the two time periods.

Phase 1

Phase 2

On the face of it, it seems like all is well and all the numbers are going up in line with the budget increase.

But look a bit more closely at the detail:

Whilst impressions went up from 295k to 437k (48% Increase), our clickthrough rate went down by 5% and CPC went up 31%

More importantly, the only real key metric to any marketing campaign is: How many leads did we get?

Our campaign relies on two stages of conversion

In Phase one of this campaign, we had 35 Stage 1 conversions and 28 Stage 2 conversions.

Having doubled the budget, what increase would you expect in the conversions? Your first answer would be a 100% increase? Nope. How about 50% then? Nope.

In Phase 2 of this campaign, with double the budget compared to Phase 1, we achieved 38 Stage 1 conversions and 28 Stage 2 conversions.

It is clear as day that simply doubling your budget is a dangerous strategy, unless you have spent time proving your campaign. I would almost always recommend that you set up an additional, different campaign, targeting the same audience, if you really want to double your budget, and then compare the two campaigns.

If there is only one horse in the race, you have no way of knowing just how good it is.

As John Mayer sings: “Oh twice as much ain’t twice as good”.

Be patient, and test. Always test. Then test some more.

Pieter K de Villiers

Author: Pieter K de Villiers

Pieter K de Villiers is slightly obsessed with systems. The systems and process automation he builds for small businesses are transformative, to say the least. Pieter is a Co-Founder of Barefoot Digital and the Amazon best-selling author of “Barefoot Business: 3 key systems to attract more leads, win more sales and delight more customers without your business killing you”.