How much should I spend on ads to get results? - Best Practices
How much should I spend on ads to get results?
Every ad you create needs ad spend, which the amount of money, usually reflected by day, that your ad is using Here’s what we recommend for people just starting out and for those who have more experience.
1. If you’re just starting out with Facebook or Google ads
We recommend starting small, even with ad campaigns at $5 /day. It’s all about testing and seeing what works and moving more budget to what’s working and pausing what is not in a short amount of time to save your spend for when you’re ready to scale. That’s what makes this AI ad tool so great! It automatically creates perfect A/B tests for you to learn from and see results. We will automatically move ad spend to the top performing creative assets and audience targeting.
Because you don’t know what ad platform, or what messaging, or what audience will do well for your business, your ideal strategy when you’re just starting out is to create at least 3 different ad campaigns each at $5 /day, for a total of $15 /day for at least 14 days and ideally 30 days.
Here's an example:
You could create 1 Google Search Ad at $5 /day and then 2 Facebook Ads (1 for retargeting and 1 for reaching new people). Or testing out different images, videos, interest targeting, ad copy, or even geographic locations. It’s up to you what you want to test, and we make it very easy for you to see the results of the ad and what’s working. You don’t want to edit or pause your ads too soon though. You want to wait at least 7 days for the learning phase to be over. There’s more information on that here. Even if you have only $5 /day to spend on ads you will be growing your brand and be seen.
2. If you’re looking to scale your ad spend
One of your key metrics will be your ‘cost per acquisition’ i.e. how much does it cost to acquire a new customer. If you are acquiring customers profitably from a winning ad test, all you’ll need to do to scale is increase your budget. It’s important to note, your cost per acquisition is someone who actually made a purchase from you, this is not a lead or someone who is on a free trial. This is someone who purchased from your business. If you don’t know your cost per acquisition, you can predict it with another metric which is ‘advertising cost of sales’. This is calculated by total ad spend / total ad revenue. On average your ‘advertising cost of sales’ should be at or below 30%. That means if you are selling a t-shirt for $100 your cost per customer should be $30. And you continually test and optimize to bring that down to $25, and then $20, and so on. Another example is if you are selling a car for $100,000, your advertising cost of sales should be at or below $30,000. While you can get leads for much cheaper, don’t expect to sell a $100,000 car with just $5 of ad spend. You could also calculate ad spend based on your revenue goals for the year
If you’re a new company, a spend of 12-20% of gross revenue is ideal. For example, if your revenue goal for the year is $100,000 your ad spend should be at least $12,000 ($100,000 x 12%) over the course of the year. Companies with a history should stick with 6-12% ad spend of gross revenue.
3. How do I increase my ad spend after I create the ad?
In the Results of your ad, scroll down and tap the pencil icon next to your budget. You can edit your budget from here. Wait at least 7 days before making any major changes to your new ad.
4. Where does the ad spend come from?
Because we connect to your ad accounts, your ad spend comes from your credit card or payment method on your Google Ads, Facebook Ads, or any other ad accounts. Please make sure this payment method on your ad accounts is up to date and active. If it’s not, your ads will not go live.
5. What currency will it spend in?
We will automatically match the currency to your Google, Facebook, or other ad platform billing settings. For example, if your ad account is based in USD, it will spend in USD. If your ad account is based in EUR, it will spend in EUR.
To get your account to help you run ads with our ChatGPT powered AI Ad platform please visit https://launchads.ai
Every ad you create needs ad spend, which the amount of money, usually reflected by day, that your ad is using Here’s what we recommend for people just starting out and for those who have more experience.
1. If you’re just starting out with Facebook or Google ads
We recommend starting small, even with ad campaigns at $5 /day. It’s all about testing and seeing what works and moving more budget to what’s working and pausing what is not in a short amount of time to save your spend for when you’re ready to scale. That’s what makes this AI ad tool so great! It automatically creates perfect A/B tests for you to learn from and see results. We will automatically move ad spend to the top performing creative assets and audience targeting.
Because you don’t know what ad platform, or what messaging, or what audience will do well for your business, your ideal strategy when you’re just starting out is to create at least 3 different ad campaigns each at $5 /day, for a total of $15 /day for at least 14 days and ideally 30 days.
Here's an example:
You could create 1 Google Search Ad at $5 /day and then 2 Facebook Ads (1 for retargeting and 1 for reaching new people). Or testing out different images, videos, interest targeting, ad copy, or even geographic locations. It’s up to you what you want to test, and we make it very easy for you to see the results of the ad and what’s working. You don’t want to edit or pause your ads too soon though. You want to wait at least 7 days for the learning phase to be over. There’s more information on that here. Even if you have only $5 /day to spend on ads you will be growing your brand and be seen.
2. If you’re looking to scale your ad spend
One of your key metrics will be your ‘cost per acquisition’ i.e. how much does it cost to acquire a new customer. If you are acquiring customers profitably from a winning ad test, all you’ll need to do to scale is increase your budget. It’s important to note, your cost per acquisition is someone who actually made a purchase from you, this is not a lead or someone who is on a free trial. This is someone who purchased from your business. If you don’t know your cost per acquisition, you can predict it with another metric which is ‘advertising cost of sales’. This is calculated by total ad spend / total ad revenue. On average your ‘advertising cost of sales’ should be at or below 30%. That means if you are selling a t-shirt for $100 your cost per customer should be $30. And you continually test and optimize to bring that down to $25, and then $20, and so on. Another example is if you are selling a car for $100,000, your advertising cost of sales should be at or below $30,000. While you can get leads for much cheaper, don’t expect to sell a $100,000 car with just $5 of ad spend. You could also calculate ad spend based on your revenue goals for the year
If you’re a new company, a spend of 12-20% of gross revenue is ideal. For example, if your revenue goal for the year is $100,000 your ad spend should be at least $12,000 ($100,000 x 12%) over the course of the year. Companies with a history should stick with 6-12% ad spend of gross revenue.
3. How do I increase my ad spend after I create the ad?
In the Results of your ad, scroll down and tap the pencil icon next to your budget. You can edit your budget from here. Wait at least 7 days before making any major changes to your new ad.
4. Where does the ad spend come from?
Because we connect to your ad accounts, your ad spend comes from your credit card or payment method on your Google Ads, Facebook Ads, or any other ad accounts. Please make sure this payment method on your ad accounts is up to date and active. If it’s not, your ads will not go live.
5. What currency will it spend in?
We will automatically match the currency to your Google, Facebook, or other ad platform billing settings. For example, if your ad account is based in USD, it will spend in USD. If your ad account is based in EUR, it will spend in EUR.
To get your account to help you run ads with our ChatGPT powered AI Ad platform please visit https://launchads.ai
Updated on: 11/10/2023
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