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bizlady08
Joined:
23 Jun 2008
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10
Location:
Chicago USA
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Posted: Thu Jun 26, 2008 2:56 am
Post subject: How do I set my advertising budget?
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Hi! If my designer ever finishes, my very first affiliate site will be going live in the next 2-3 weeks. I'm preparing a budget and am wondering what you guys use as a general rule of thumb for advertising/marketing spend? I plan to use as many free resources as possible, but I am also outsourcing several projects to Elancers and want to boost exposure through AdWords, etc. (I have some experience with PPC advertising.)
I was thinking that during my first year in business, marketing/advertising costs could easily run about 20%-25% of projected gross revenues (before taxes, interest expense, etc.). What do you think? Is that too high? I look forward to your feedback.
bizlady08
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InternetMarketing_IQ
Joined:
13 Aug 2006
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1138
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Posted: Thu Jun 26, 2008 8:45 pm
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I had an opportunity to test SpeedPPC which is Allan's product when it first came out. It's been improved and upgraded so it's even better now.
I can say I don't do full time PPC anymore. It's very time intensive and you have to stay on top of it just like you were watching the stock market. I wouldn't even pretend to do any REAL PPC without the right tools.
http://www.speedppc.com/
Make sure you budget for it.
There is no way to really answer your question, you have to do that. And you do it by picking a market and testing.
Professional PPC is a tricky business. Split testing, writing and rewriting headlines, sales letters, landing pages.
People who are successful at Affiliate PPC really can call themselves Internet Marketers.
If you have your own products to sell you have more room to work with your margins.
Some PPC players will actually go in the hole to build their lists and then hit that list over and over with their "Backend".
So think about your plan, then figure out your budget.
I can tall you that the guys that are truly professional and making big dollars in PPC are doing it on very slim margins.
I know of one who spends $700,000 a year to gross about a million and a half. That's good profit!
Sorry the above is mostly about PPC.
I do outsource to some offshore linking services. But I have no specific budget for it.
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AllanGardyne
Site Admin
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6302
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by the beach, Australia
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Posted: Fri Jun 27, 2008 5:28 am
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Hi bizlady08, I built my Internet business by pulling myself up by the bootstraps because I was flat broke when I started. I did everything I possibly could free. So I'm probably a bit biased on the subject - and very cautious.
Unless you're trying to build a brand and generate buzz, my advice would be to start your advertising very slowly and cautiously and test, test, test.
Unless you have very experienced people helping you, you'll most likely find at the start that you spend more dollars than you bring in from the advertising.
Maybe a LOT more, if you're not careful.
You can use PPC advertising as a very quick way to test the effectiveness of your preselling. Send a few hundred visitors to a page and see if it produces sales. Then tweak the headline or something else on the page and send another few hundred and see if your sales improve.
Keep testing and tweaking. If you manage to reach the stage where you're generating more revenue than you're spending, slowly increase your advertising.
You'll probably find you have a lot to learn and a lot of experimenting to do before you manage to reach the stage where your advertising gives you a positive return on investment. I imagine most affiliates don't master that skill.
I don't know what your skills are, and what your designer's skills are, so I may be telling you stuff you already know...
Some affiliate sites are designed to be advertised and some are designed to attract free traffic from search engines. Some affiliates do manage to create sites designed for BOTH, but that's not easily achieved.
For example, AssociatePrograms.com is aimed at free traffic. Paying to advertise it just wouldn't work, especially not in this highly competitive niche. There are far too many items on every page competing for the visitor's attention.
[UPDATE and Clarification: I should have said MOST of AssociatePrograms.com is designed for free traffic. Some individual pages are designed for PPC traffic.]
If you're modeling your site on some other affiliate sites you've seen, you may want to see if you can find out if those sites buy advertising.
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AssociatePrograms.com - You're here. Explore it!
Last edited by AllanGardyne on Tue May 12, 2009 11:28 pm; edited 1 time in total |
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ajp76054
Joined:
12 May 2009
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5
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Posted: Tue May 12, 2009 9:35 pm
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I dont think that is to high for your first year it might be just right. This is the most important time to get the marketing going and then as time goes on you can back that down. You want to get the word out fast and hard to get a good quick off. I am not a big fan of adwords or ppc or ppv however people are going to use them so I wish you the best of luck.
Also my link sig is another great free resource that you should check out.
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Programmer
Joined:
02 Mar 2009
Posts:
5
Location:
India
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Posted: Thu Jul 02, 2009 3:58 pm
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Planning a budget for your business helps in controlling the operating costs while running your internet home business. Below are the 4 strategies that you can follow to keep control over the budget for your business:
1. In the beginning try to identify and make use of the free resources that are available on the internet for promoting your business till you get some experience, so that your money is not wasted on wrong resources.
2. Make a list of fixed and the variable costs required for your business on monthly basis and try to determine the areas where you can save money.
3. Make it a habit to note down all the expenses and every sale you make, seperately, so that you know at the end, how much you have earned and how much your expenses are?
4. See that you don't exceed your budget beyond particular limit until you find that your earnings are atleast equal to what you are spending, if not more, in your earlier stages of business.
I hope this helps.
Damodar
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jonathanfigaro
Joined:
16 Jun 2009
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35
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Posted: Fri Jul 03, 2009 7:02 pm
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By budgeting your business , you don't lose or use unnecessary money , that can be use somewhere else.
1. Budget by finding what your budget is.
2. Write down every expense
3. Think about each payment for at least a week.
I say a week, because if you still feel you need it a week after, then its worth the money. |
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MyOnlineSuccess
Joined:
30 May 2009
Posts:
32
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Posted: Wed Aug 05, 2009 5:33 am
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There are no set rules and it varies a lot across different niche markets.
Adwords traffic has become very expensive and making money on the front en has become tough.
My advice is that you determine what a customer is worth to you over a lifetime or at least after your upsell. This will probably the best guide in determine how much to spend on advertising.
PPC is all about ROI. It's not for the feint harted. You need to be on top of it all the time and you have to test and track everything.
It took me about $20,000 to learn the lessons I did. You can burn through a $1,000 very quickly, so you better start small. Test. Track, adjust and test some more until you get a good ROI. Then scale it.
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ELArmson
Joined:
22 Aug 2009
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1
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Posted: Sat Aug 22, 2009 3:11 pm
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It's best to test first before setting your budget. Once you have some results to guide you, you can determine how much you can potentially make on that ad and how much you can spend to break even or profit. You might even take a loss early on, but of course your goal will be to profit. One big issue I have with PPC is that you often don't profit and, as someone already said, you have to keep your eye on your campaigns which can be distracting when you have other things you need to do.
Start your test campaign based on what you can afford to spend (and afford to lose). Initially, you want to get as many clicks as possible. A good start is 200 to see any kind of results. Your keyword choice will determine what you'll need to pay in order to get the ad exposure to bring that many clicks within a reasonable time period.
A common rule of thumb in the offline world is that advertising is 25% of your budget, if I recall.
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