How to Plan your Display Advertising Budget

January 20, 2015 Emma Cullen

Taking a look at your display advertising budget will help build ad success.

Photo credit: “Paper Money” by Kevin Dooley is licensed under CC BY 4.0

Setting a Display advertising budget is no easy task. Advertising budgets have become an area of research and debate amongst marketers and academics a like. Most advertisers, however, just want to know how they can budget their advertising campaigns successfully whilst seeing a return on investment.

We’ve put together some practical tips so that advertisers can plan display advertising budgets.

Why Budget for Display Advertising?

Display advertising, like all other areas of marketing and advertising requires time and money to be spent on it, therefore a display advertising budget must be created. Whilst display advertising campaigns are a great way to build brand awareness, and to generate leads and sales one must always be aware of how much is being spent so that you reap the benefits of your display advertising campaigns rather than end up seeing no profitable return.

Display Advertising Budgeting Methods

Display advertising budgets come in all shapes and forms. There are a number of common ways that businesses determine their advertising campaign, some which are highlighted below:

Dedicate time to think of a solution to create your display advertising budget

Photo credit: “Idea Bulb” by Ramunas Geciauskas is licensed under CC BY 4.0

 

1. Percentage of Sales

In “advertising history”, using a percentage of sales has been one of the most common methods. The average percentage of sales to spend on advertising is around 5%. However, some, such as expert Roy H. Williams (you can read his method here), argue that this method does not work for all industries or that it is a far to simple model to follow to determine a display advertising budget.

2. Goal-Orientated

Often your goals can influence your display advertising budget. For example, a goal to have takeover banners on all major news websites regularly is going to require a bigger budget than running small retargeting campaigns throughout the year.

3. Industry Standard

To be able to compete in your industry it might be worth looking at what the industry standard for spend on advertising and display advertising is. However, you might not want to do what your competitors are doing to set yourself apart in the industry.

4. Campaign History

Using display advertising campaign history or sales history to determine future spend is an often debated way of determining a budget. One argument is that if something has worked for you before, then why change it. However, others argue that there are so many external factors that can influence a display advertising campaign- it is not just the amount of money spent on a campaign that determines its success. Other factors such as timing can play a huge part in determining the success of a campaign too.

Final thoughts – Make Budgeting Simple

Creating and executing display advertising budgets may not be the most exciting part of advertising, but it is important. By keeping your processes simple and relevant to your marketing plan, business and target audience you can build a budget whilst keeping some of these things in mind:

  • Do the math! Whilst there are popular theories out there about how much you should spend on your advertising budget, at the end of the day, such numbers really depend on your business and goals.
  • Consider external factors. Whilst profits and cash-flow are huge contributing factors to how much you should allocate to your advertising budget that are specific to your business or brand.
  • Be flexible. Whilst you should stick to your budget, you should be flexible within in, especially when it comes to reallocating your budget during the run of your campaign. If something’s not working, change it to something that works, it might possibly save your display advertising campaign.

Whilst how much money is important, how you spend it is also crucial. Make sure that you get the most out of your money and invest in smarter ways to spending your budget. Choose the best ad production solutions as well as publishing channels that are transparent and effective.

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