How to determine ad budget?

[Eagles910]

How do you go about determining your initial advertising budget? As in, how much you should spend when you first launch.

And at what point do you reevaluate that budget and adjust it higher or lower later on? Is it when business is dipping? Or when you have more work than you can handle, etc?

It depends on what type of business you have, and where the business is located. Let's say you have a business located in the mall. You would not need much Ad promotion because the Mall has a steady flow of consumers. To answer your second question. You should only spend money on promotion when you need business. If you have to much work to handle it makes no sense to add more your plate. Save that money for when you need it.

[jswindell]

Taking a good look at your demographic will answer most of your questions. If you are confident that your product or service can turn a profit, then take a deeper look at your competition and their methods and mediums used. Once you find two that you are comfortable with, use those in addition to word of mouth advertising.

Estimating numbers is not always easy but if you calculate the estimated and figure a 50% conversion rate (minimum), then you should get a return on money spent on advertising, earned revenue and gained a customer base.

[mikelouis]

Do not spend a lot of money on ad budget. Start small and see the reaction of the people. If people love what they see, then you can add some money to make the ad campaign more successful. If the ad is not great, then consider changing it before it takes up most of your money.

[Lithium]

It's very simple : spend as little money as possible.

[Didi]

I haven't had an ad budget. I've chosen to spend no money on the ads and my business has become pretty popular quickly.

[penann]

Always keep an eye on the results while spending little amounts of money so if you see it's not working at least you won't have lost much, lt is so easy to get carried away with advertising like l did with my first online business, the mistake l made was to advertise in places that were not relevant to my business and l also spent a lot on advertising with google which ended up being a waste of money. If l had to do it again l would do my research when it comes to were to advertise as that is the key in my opinion.

[Didi]

I must agree with penann. You need to be very careful about how much you spend and if you don't have immediate results, quit it.

[Jessi]

You should only spend money on promotion when you need business. If you have to much work to handle it makes no sense to add more your plate. Save that money for when you need it.

Please be careful with that reasoning!!

Depending on the business, that could be the exact opposite of what you should do. For example, a surgeon client of mine makes this mistake. He gets busy, shuts off his advertising because he thinks he has plenty of business, but then he slows way down and panics. If he would just continue his advertising, then he would have a steady stream of patients coming in. This is the type of "customer" that spends time researching before buying, so his advertising methods may actually be working on the people who will call him in a month or two instead of immediately.

[pr0xx1d]

Just spend as little as possible and see if you have any luck. If it looks profitable, spend more than 40 dollars.

This is actually a great rule of thumb. Youtube Video ads have a HUGE ROI for your website/blog though honestly.

[wandering wildman]

Word of mouth is obviously your best opportunity. I still think some of the Facebook ads can be reasonable enough to pay a few dollars for. Monitor your goals often. Don't be afraid to make changes with your budget.