Help me to plan a budget

5 replies
I trying to plan my advertisement budget but I really missing experience in this area, need your expert help:


Assuming that:
  • in my sector average CTR is 3%
  • Adwords click cost is 1.5$
  • target audience size is about 12M
  • My website has about 25% of returning visitors

how much money I should spent for generating traffic of 20M monthly (initial investment \ ongoing investment)?

How you would suggest to spent that budget (where \ how)?
#budget #plan
Avatar of Unregistered
  • Originally Posted by Illidan80 View Post

    I trying to plan my advertisement budget but I really missing experience in this area, need your expert help:


    Assuming that:
    • in my sector average CTR is 3%
    • Adwords click cost is 1.5$
    • target audience size is about 12M
    • My website has about 25% of returning visitors

    how much money I should spent for generating traffic of 20M monthly (initial investment ongoing investment)?
    Test, test and do more testing. There's too many variables to answer your question. You will have to test and see which advertising platform sends the best quality leads to your offer. Generating traffic of 20M ( I'm assuming you mean 20 Million Targeted leads) monthly could cost anywhere from $1000 to $10,000, or maybe even $100,000 per month, depending on your traffic source. How are you going to know unless you testing each traffic source that's congruent to your niche. How much are you prepared to spend? What is you monthly advertising budget?
    Originally Posted by Illidan80 View Post

    How you would suggest to spent that budget (where how)?
    There are a number of courses you can do, on online marketing, and traffic generation. Invest in a good one, and start applying everything you have learned in the traffic generation course before you start spending money wildly on advertising, without truly/fully understanding what it is that you are doing. Asking for advertising budget advice on a forum, isn't going to give you any conclusive answers, without you actually taking action and testing your market with paid advertising.
    {{ DiscussionBoard.errors[11418493].message }}
    • Profile picture of the author Mike Buslovich
      I agree testing is huge, I just wonder which ads are more effective? google, Facebook or Instagram?
      {{ DiscussionBoard.errors[11491181].message }}
  • Profile picture of the author dave_hermansen
    You are missing the biggest piece of the puzzle here - your profit per sale. It doesn't matter how much money a site generates if the cost of advertising exceeds the profits from that advertising. Revenue is a meaningless number.

    You also do not have conversion information - another extremely important thing. Clicks that don't convert can be worse than no clicks at all. What is the conversion rate? If 12 million people see an ad (they won't) and 3.5% click on it, that gives you 420,000 clicks and $630,000 spent over whatever period of time you think will get you exposure to all of those people. If 2% of those clicks purchase something, that is 8,400 sales.

    Don't use an overall market to base PPC projections on. Use actual monthly search numbers for individual search phrases that you intend to bid on. Then, figure out what the ad spend would be for each of those search phrases based upon the click through rate you think you will get, which will give you your monthly ad spend for each phrase. That is your monthly ad spend budget.

    Then, figure out the number of conversions you will get based on the percentage of those clicks you think will buy and multiply that by the average profit you think you will make per sale. Hopefully, that second number is bigger than the first.

    Since 25% of customers become repeat buyers, you may be willing to take a loss on the initial acquisition cost of each customer. Whether it is worth it or not depends on how many more purchases the average repeat customer will make - another major missing piece of the puzzle - and, again, what the average profit is on those purchases.
    Signature
    StoreCoach.com- Learn How to Dropship the Right Way - Buy & Sell Websites - Partner with Coach
    My PROVEN ecommerce process, as seen on: Fox News, the NY Times & Flippa
    {{ DiscussionBoard.errors[11418815].message }}
  • Profile picture of the author Jason Kanigan
    Traffic...


    ...and Conversion.


    What's your margin per sale?



    That will help you figure out what Cost of Customer Acquisition this project can bear.


    If you have upsells, you can use the entirety of your margin on the first sale as your CCA.
    {{ DiscussionBoard.errors[11418837].message }}
    • Profile picture of the author dave_hermansen
      Originally Posted by Jason Kanigan View Post

      Traffic...


      ...and Conversion.


      What's your margin per sale?



      That will help you figure out what Cost of Customer Acquisition this project can bear.


      If you have upsells, you can use the entirety of your margin on the first sale as your CCA.
      Margin has nothing to do with this. It's profit that matters.
      Signature
      StoreCoach.com- Learn How to Dropship the Right Way - Buy & Sell Websites - Partner with Coach
      My PROVEN ecommerce process, as seen on: Fox News, the NY Times & Flippa
      {{ DiscussionBoard.errors[11419041].message }}
  • Profile picture of the author ChrisBa
    Originally Posted by Illidan80 View Post

    I trying to plan my advertisement budget but I really missing experience in this area, need your expert help:


    Assuming that:
    • in my sector average CTR is 3%
    • Adwords click cost is 1.5$
    • target audience size is about 12M
    • My website has about 25% of returning visitors

    how much money I should spent for generating traffic of 20M monthly (initial investment ongoing investment)?

    How you would suggest to spent that budget (where how)?
    It's hard to give recommendations without giving the full story..

    What i can see, you are planning on using paid traffic (ppc - Google Adwords), what are you doing after this traffic comes through? Where's it going? What's the plan?
    {{ DiscussionBoard.errors[11420473].message }}
Avatar of Unregistered

Trending Topics