First, an advertising budget is the amount of money you decide to allocate to the paid promotion of your service or product offerings for your brand or company over a predetermined period of time. An advertising budget can be planned over a specific period of time, either monthly or annually.

Advertising platforms such as Google, Meta and LinkedIn have brought a revolution in digital marketing with their bidding system. This system allows advertisers to enhance the delivery of their ads by bidding on ad space based on their desired objectives, such as impressions, shares, or clicks.

The billing for advertising accounts is tailored to specific objectives, leading to various billing models to suit different campaign goals. For instance, the Cost Per Thousand (CPM) model is employed to quantify the expense associated with garnering 1000 impressions, offering a metric for visibility and reach. Conversely, the Cost Per Click (CPC) model determines the expense incurred for each click on an advertisement, providing a direct measure of user engagement and interest. These models allow advertisers to strategically allocate their budgets based on the desired outcome, whether broad awareness or direct interaction.

Your advertising budget needs to be aligned with your business, your ads, your audience, and your business objectives. Depending on volume, audience type and competition, each platform varies the cost of advertising, and therefore the budgets dedicated to each company.

There are multiple factors to consider and different bidding approaches available. Let us take a look, for example, at the models offered by platforms such as Facebook and LinkedIn.

Depending on your campaign objectives, LinkedIn Ads allows you to choose three types of bidding strategies to maximize the visibility of your ads:

Maximum Delivery: This bidding option is used to obtain a good volume of results using your entire budget. Billing is per impression.

Target Cost Bidding: If you have specific campaign objectives, such as increasing brand awareness, website visits, engagement, or video views and want to predefine the cost, this type of bidding is for you.

Manual Bidding: This bidding option is ideal if you want to define the maximum bid amount to invest, and you want to control it.

There are five elements to the Facebook Ads bidding process that will influence the cost and therefore the definition of your budget:

Advertising objective: This is what you want to achieve. With this objective, Facebook will search for the most susceptible people to engage with your ad.

Budget and duration: To ensure that the algorithm allocates the budget to the best-performing ads and gains a better understanding of your target audience, it is generally recommended to define the budget to be used over a period of at least seven days.

Creative: If you are going to have successful ads, they need to be informative and engage your online audience. That is why it is important to make sure they are interesting at first glance. The higher the creative value of an ad, the more likely it is to win bids.

It is essential for you to understand the different budgeting options each platform offers. To do this, To do this, you need to know what goals you want to achieve with your advertising campaigns. Once your objectives are defined, you can then work on your strategy, that is, the means that will allow you to achieve the desired results. By having a good grasp of your strategy, you will be able to set a realistic budget.

For instance, if your strategy is to acquire new leads, the costs will likely be higher than those for promoting your brand through brand awareness. This is because there is less competition for brand awareness campaigns.

Consider other factors such as your business industry, your target audience’s demographics and even your conversion funnel, each phase within which will require you to allocate certain expenses differently.

It is crucial to set a budget for online advertising to ensure you are getting the most out of your campaigns. You do not want to waste precious resources, after all. Here are some best practices to consider when setting an effective budget for your online ads.

First, you need to define your marketing objectives. Knowing what you want to achieve with your advertising campaign is key. It is lead generation or sales. Once you have clarified your objectives, you will have a better understanding of how much budget you need to allocate.

Secondly, you need to calculate how much you can afford to spend per acquisition for your business. You can use data specific to your business to determine this as it will help you achieve your objectives while maintaining profitability over the budget accordingly.

If you have historical data from previous campaigns, use it to evaluate your ROI or acquisition costs. You can then adjust your budget accordingly.

Start with a modest budget and adjust it based on the results you achieve. A monthly budget of $300 to $900 is suggested for social network advertising, i.e., $10 to $30 a day to start rolling out a few social media campaigns. However, this is just a suggestion, and you should adjust your budget according to your specific business needs and results.

Use analytical tools such as Meta Ads Manager to track the performance of your campaigns and identify what works best. For instance, on Google Ads, your ads are in ad groups, which may target specific keywords. By analyzing ad group performance, you can gain important insights into how different sets of keywords perform.

Furthermore, you have the option to adjust your budget based on changes in your business sector and campaign performance. Certain advertising networks, like Facebook, offer advanced budget control methods that include Campaign Budget Optimization. This feature enables you to automatically allocate your budget to the best-performing ads. You can also establish a daily or global budget, and even use budget planning to automatically increase your daily budget according to predefined periods and amounts.

Although acquisition costs tend to rise on all platforms, advertising on social networks remains highly advantageous due to its simplified buying paths and the ability to reach multiple potential customers. To ensure that you do not spend too much too quickly, it is essential to enlist the help of a media specialist to calculate or adapt your social network advertising budget. You can set a fixed budget by considering the cost of managing your campaigns. It is recommended that you test different advertising formats to determine which platform works best, and gradually increase spending on it. By following these steps, your company will be able to achieve optimal results for its advertising campaigns and connect with its target audience in a meaningful way.

• What are the specific business objectives for each advertising campaign you plan?
• How do you align your budget with your objectives?
• How does the competitiveness of the platform influence your costs?