What budget should you plan for advertising. We receive too many requests for for which the promotional budget is not suitable, which is why we decided to write this article in which we give you some elements of understanding on advertising expenses.
When entering the world of e-commerce, every entrepreneur in this field must have the essential knowledge about online advertising. After learning how it works and the fundamentals, you will have to ask yourself the question of how to determine the budget for advertising for your online business.
Budget as a percentage of sales
In principle, any e-commerce business should use a percentage of its revenue for advertising budgets. This corresponds, in a classic business, to commercial expenses and commissions. (See our article on
This ratio can be different depending on the case, the market and the conversion rate.
Our recommendation is to dedicate about 10% of your profits to advertising. (Commission most frequently used for business development).
Spending can also be done according to a schedule.
If you are in a sales period or your online store is booming, you can spend more money on ads (for example 15%). But you must be confident enough in the results you can achieve, otherwise stick to the 10% rate.
This method of spending will never put you in the red zone or bankrupt you because you always spend a small portion of the money based on your sale and you keep an eye on your profits and the market.
Constant e-commerce spending
It is always important for new e-tailers to pay attention to their , especially when they do not have any alternative income.
As a new seller on the web, your online store may not generate any revenue during the first few months of its launch. Launching an online advertising campaign will allow you to immediately activate your business by offering your products to Internet users who use search engines for example. ex. Google Shopping. To start, you can for example spend a fixed amount for a sufficient period (3 to 6 months) and this while waiting to have the necessary income to use a percentage of your turnover.
Also, a fixed investment in different advertising channels for your e-commerce can also help you know the best channel for your conversions and which channels are not working well.
However, when using a constant advertising budget, set a financial goal e.g. this channel should increase profits by 20% or your sales should double by the end of the year.
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What is the budget to plan for advertising an online sales site?
For example, ask other entrepreneurs in the same industry or do in-depth research on your competitors’ spending and preferred channels to average marketing budget by industry.
Start with a minimum budget of 500 Francs in an advertising channel and get help from a specialized agency to maximize your return on investment. Indeed, we see too often companies manage their Google ads accounts themselves, get no results because a good setup and good optimization requires expertise, and conclude that this channel does not work. It would be a shame to miss out on a profit-generating channel because of a bad experience.
Marketing Budget Calculator – ROI
Calculating is not a new concept for marketers and business people in general. Let’s explore it in a little more detail.
It is a calculation to measure the company’s strategy and marketing performance.
A professional ROI calculation differentiates marketers and business professionals from amateurs. It gives you real insight into how much you are spending on your marketing and how profitable your advertising operations are.
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To clarify, ROI is the amount of money you used from your marketing budget and the volume of commission you earned from it.
Sometimes you will have to persist with advertising on a channel for several months until you know how well it works and how profitable it is.
Whether you are new to advertising or are used to advertising for your e-commerce
You need to closely monitor your business metrics and do a detailed analysis of them. As a result, you will be able to collect the ROI obtained from advertising. Focus your actions and spend more on the advertising channels that work for your online store.
Finally, after reading this article, I hope you have gained some useful information to start a financial plan for marketing your e-commerce.
If you want to count on Google Ads advertising experts , contact our agency !
You can try different methods, but be consistent and analyze the results thoroughly. Gradually, you will be led to discover the budget needed for ads to skyrocket your revenue.
The world after, change All these expressions
These words that we hear a lot in the media since we were able to start living and working in a certain normality again, will undoubtedly become a reality in the oman phone number powder months to come. People’s behaviors will have to change, the situation we have experienced during this pandemic will have repercussions on our way of living and consuming. We can already see the beginnings with people who, following this period, are planning to leave the city to get closer to the countryside and nature. Advertising and communication will also have to play their roles in these developments, by supporting consumers in these upcoming changes.
And what could be better for the sector than to take up the challenge of the many changes and opportunities that are opening up before us, so that it too can undergo its transformation.
During this period we have seen, in particular
A rise in local consumption. People have turned to local producers and cantonal farms, which sell their products directly. Consumers have thus been able to adb directory discover that, just a few kilometres from their homes, excellent producers make good, healthy products that also have a strong ecological impact. This may seem like a drop in the ocean, but all these producers, these farmers deserve to be known and recognised. And this is where the agencies will have a major role to play in the months and years to come.
These small producers, as we like to call them
Deserve to be looked at much more often than usual because without them, we wouldn’t be able to eat. Today, we all know the power of digital, the internet and social networks. Our role as an agency that masters its codes and subtleties will be to support all these small farms to begin or continue their digital transformations, with solutions adapted to each one. So that consumers know them and their products better, digital and the skills of agencies in this area will create a convergence to create a virtuous circle.
Far from the idea of giving lessons in this post
(and in those that will follow) but it is important that we, communication professionals, become aware of the changes that will occur in the future. We will have to take part and be present alongside all companies (not just producers) who will want to initiate changes in their digital communication strategies and their e-commerce strategies because mentalities will evolve and brands will have to be present with consumers.
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