What budget for a local ad campaign?
“How much should I put in?” is the wrong first question. The right one: “how many customers do I want, and how much is a customer worth to me?” The budget follows from that, in that direction, never the other way round.
Working backwards, in three lines
Start from the end and work back:
- How many new customers do you want this month? Be realistic: it is the number you can really serve.
- How many requests does it take to make a customer? If you sign one quote in three, you need three requests per customer you aim for.
- How much does a request cost in your trade? It is the only figure you do not know yet. Your first two to three weeks of ads will give it to you: budget spent divided by requests received.
Customers wanted × requests needed × cost of a request: that is your budget. A figure you built and can defend, not an amount pulled out of a hat.
There is a floor…
Below a certain daily budget, the ad networks deliver poorly: the algorithm does not get enough responses to learn who reacts to your ad, delivery becomes erratic, and the results mean nothing. If the budget from your calculation is too low to hold that floor for a month, it is better to concentrate: one campaign, one service, a tight area, rather than spreading it thin.
…and a ceiling nobody tells you about
In a local area, the audience is finite: there are only so many residents to show your ad to. Beyond a certain budget, you do not reach more people: you show the same ad more often to the same people, at a higher and higher price, and with growing annoyance. The signs of saturation: the cost per request rising week after week without any change on your side, and the “frequency” climbing in the ad network’s statistics. At that stage, raising the budget is the wrong reflex; widening the area slightly or adding a second service is the right one.
The three beginner mistakes
- Judging in three days. A campaign’s first days are a learning phase: the network tests, gets it wrong, adjusts. Cutting a campaign after 72 hours means paying for the learning without ever getting the results. Give it two to three weeks.
- Touching everything, every day. Every major change restarts the learning. Choose a pace (one review a week) and stick to it.
- Counting clicks instead of requests. A click does not pay your bills. The only measure that counts: how many requests received, at what cost, and how many became customers. If you do not follow that chain, you are flying blind, which is exactly what a CRM linked to your campaigns is for.
And if the market is too expensive for you?
Sometimes working backwards gives an unpleasant verdict: at the price of a prospect in your sector, your margin does not cover acquisition. That is not a reason to give up, it is information: you need either to raise the value of a customer (job value, repeat business, moving upmarket) or to improve your conversion rate (speed of call-back, quality of the first contact) before spending more. Advertising amplifies what exists; it repairs nothing.