Setting Your Advertising Goals and Budget

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How much are you willing to spend to advertise your business? More importantly, how much should you spend to position your company in a way that will attract clients? For many, the success of a company is based on how much that company can afford to pour into its advertising department. While this is partly true, the more important thing is determining which avenues and methods to use to reach the target market. Money is important, but targeting the right market with the right method is more critical.

At first, you might need a Google AdWords specialist to determine which keywords you must use for your business’ website. Google Ads is a cheap way to promote your business because you are charged based only on clicks. Some ads cost less than $.20, while others cost $2. The best thing about this is that you pay only for the amount you set. When your balance has been used up, the ads will stop working.

Fixed Percentage of Sales

Most businesses follow this format: Take the gross sales for the past year or the average sales for the past few years and allocate a specific percentage of that amount. Usually, businesses will take 2% to 5% of their annual sales for an advertising budget. This means that if your annual sales reached $250,000, your advertising budget is somewhere between $5,000 and $12,500.

Industry Standard

You can also follow the industry standard. Trade associations and industry publications can provide you with the number for this. However, this will only work if your company is on par with its competitors. If your competition is earning more than your company does, you might find yourself spending more on advertising than you can afford.


strategy planning

List down your advertising goals such as increasing your followers to 5,000 in a year and having more engagement on social media. Next, pour your budget into the methods that your company needs the most. While this may not always work because failing on one advertising goal means that your budget will be depleted, it is a risky investment. Once the risk pays off, the results will be well worth it.

Risk It All

Some businesses are major risk-takers, putting all their capital—setting aside just enough to keep the business afloat and feed the family—on advertising. In this digital age, this may be well worth the risk. Content marketing, SEO, search engine marketing, and social media marketing all require money for huge gains.

Increase as Necessary

Every month, there seems to be a new trend in advertising. Make sure never to miss out on these opportunities. Explore new avenues and ways of promoting your business. You can test the waters first before diving in. Set a small initial budget and then increase that budget as necessary.

Each of these methods has its pros and cons. The important thing to remember about choosing a method for advertising is knowing who to target. Study the demographics of your audience before deciding which method to use to target them.

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