advertisement budget

Promoting your business online in 2021 – Calculating Online Advertisement Budget

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Last week in our Blogpost series about promoting your business online in 2021 we talked about Audience and Platforms and how to categorize them based on followers, likes and other factors. In this post we will show you how to use the information from the previous week to calculate a decent Online Advertisement Budget.

Before we get started let us not forget to consider running ads on Google. You may also have relationships with other platforms where you like to run separate ads. To make it simpler we will focus in our example on Google and Social Media.

Based on the ranking of the social media platforms we explained last week, you will have a good idea where your budget will reach your audience best. It is now time to put that knowledge to use. First advise we like you to follow is to calculate with at least $10 per day per platform as your minimum advertisement budget. If you can afford more as your minimum even better.

In our example we will have Google, Facebook, Instagram, Pinterest and TikTok, which brings us to a total of 5 platforms. We therefore need to calculate with $50 per day. Our ads for the Holiday Season should start in September to help with the algorithm. It will also allow us to make our first adjustments before the season really begins. We will aim to end the campaign on the 20th December, to have last minute sales we can still ship in time. So between the 1st September and the 20th December we have 111 days. Our first calculation is therefore easy 111 days x $50 = $5,550 for our overall budget.

Next we will look at the different platforms and rank them based on the method we described in our last post. The reason we have Google as the top platform on our list is because search engines have given us a better return of investment for the type of ads we are running during the season. We therefore assign to Google a fixed 40% and will assign the rest to the remaining platforms. In our example the list will look like this:

  • Google 40%
  • Instagram 30% 
  • Facebook 15%
  • Pintrest 10%
  • TikTok 5%

Right away we can see TikTok will end up with a very small overall budget and if we divide that by 111 days we realize the platform is way below our $10 per day rule. As long as we can not increase our overall budget we will have to eliminate TikTok from the list and adding the budget to the remaining platforms. Repeat the elimination process until you are able to run an ad for a platform for at least $10 a day. We did that with our example list too and after eliminating the least performing platforms our final list will look like this:

  • Google 40% ($2,220.00 / 111 = $19.14 per day)
  • Instagram 35% ($1,942.50 / 111 = $16.75 per day)
  • Facebook 25% ($1,387.50 / 111 = $11.96 per day)

Please keep in mind this is just a simple example to calculate an overall advertisement budget quickly and is primarily aimed at small business owners with a very limited budget. However, the calculation today should allow you to get an overview and increase your success rate for your ad campaign during the holiday season. 

After we have calculated our overall available budget for each platform we are now one step closer and can use the information from today in our next post. Next Wednesday we will concentrate on distributing the budget effectively over the holiday season.

If you like us take a look at your ad strategy for 2021, feel free to contact us.

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