If you or your social media manager is posting every day on your business social media and this effort is not getting you any sales then listen up. Posting on social media is a completely useless task if you are not willing to put some paid advertising dollars behind your content. Because social media algorithms limit the reach of business pages and profiles, you are very unlikely to go viral and magically reach your ideal target audience via content posting alone. What you need to do instead is produce high-quality storytelling content and promote it to your target customer with an appropriate amount of money, in order to give yourself an actual chance at making a return.

I get it but how much is an appropriate amount of ad spend?

There is actually a great calculation that anyone can use to try to figure out how much they should budget for their advertising campaigns based on their sales goals.

It goes like this:

Proven Product ( Has brand awareness with existing audience and potential for repeat buyers )

30% of your revenue goal

Unproven Product ( No or few customers existing customers or brand awareness is trying to sell for the first time )

50%-100% of your revenue goal

This may seem startling at first but where this calculation comes from is based on two key concepts.

1. That the average ROAS globally is approximately 2:8 or 280%. This is not a concrete metric because businesses vary so dramatically but, it can be used to explain that nobody is the miraculous exception. Don’t feel bad if you aren’t boasting massive ROAS at any point in the game, but especially at the beginning of your paid advertising journey.

2.New businesses don’t typically generate revenue right away, they usually lose money on advertising and then recover that over time as they create repeat buyers and nurture their leads. Expecting your new and unproven offer to immediately generate a dramatic return IS unrealistic, even if you have had some internet marketing funnel hacking extraordinaire” promise you otherwise on a webinar. In fact, because first-round marketing on a new unproven product is so high risk due to the number of variables you should never assume that you’ll make a massive profit when launching ads for the first time. Rather, the more intelligent way to tackle this is to think of ad spending as an inevitable expense to your business while you build your loyal customer base.

Okay so now that we have all that sorted out, what is the actual amount that a business owner should be spending on their paid advertising to garner SOME potential of R.O.I?

Our response is a minimum of $6.
Yep, that’s the amount.
$6 measly dollars a day. 

But how?

At BP Creative Marketing we have a lot of experience working with small budgets and we have learned the best way to run sustainable businesses for small/midsize businesses is with a 3 ad layered campaign, where each ad needs a minimum of $2 a day to run. This is of course the minimum, for a slow start and eventual scaling. Here is how this campaign would look.

Objective Budget
Traffic  Get as many relevant people onto the website at the lowest cost $2
Lead Capture Capture as many of the website visitors to the website as leads for remarketing at the lowest cost $2
Conversion ( Sales )  Show up consistently to the most interested leads with an irresistible offer $2

This is a layered 6-dollar ad campaign that is intelligently set up so that you are tiering the level of engagement and ONLY running the more expensive conversion ads to your most engaged visitors. In this model you almost always see the conversion ad start to generate sales within 30 days because it is a numbers game. At the top tier, you are paying for low cost relevant to your product traffic and you want to get as much of it as you possibly can. Your most aggressive advertising is reserved for the small % of people who took enough valuable interactions to indicate to you that they were interested in buying.

We have found that even the most inexperienced social media advertiser can generate enough sales to cover their ad spend ( break even ) in this $ 6-a-day model. Then, in time as they have built a large enough pool of interest via this layered campaign begin to see a surplus return.

The catch. You need to keep this bad boy running. It is your automated sales machine! You cannot get scared away when the money pile doesn’t rise immediately. Ads are an inevitable investment.

What if I have more to spend than $6 a day does that change things?

The above strategy is meant to serve as an explanation of how a layered, low-cost campaign can look for a generalized business. If your budget is more than $6 a day you can speed up your rate of growth simply by running the same set of layered campaigns but with a higher budget. This same strategy can be applied to businesses with any budget per month, the key is simply to layer the campaigns.

If you have more budget you can disperse it more creatively to test audiences or campaign concepts. You can also simply speed things up by spending more and gathering a larger number of impressions and website hits.

At the end of the day, there is an approach that can work for any ad budget you just need to, HAVE A BUDGET.

If you’re launching for the first time, keep reading, we’re gonna tell you EXACTLY what you need to do.