Digital campaigns are a valuable asset if your brand wishes to increase awareness amongst target audiences and drive demand for your products and services. As a marketing director or business owner, knowing how to create and manage a digital advertising budget is just as important as knowing where to advertise and who to target.

Today, we’ll discuss how to determine the budget for your very first campaign(s), and how to continue to allocate that budget over time. The practices outlined here are the very same ones that our digital advertising services team uses with our clients.

Initial Digital Advertising Budget

Your very first campaigns are data-generating tests. If you’ve taken the time to research and create a solid digital strategy, you should have a solid idea of which digital advertising mediums hold potential for your brand. Your first campaigns will validate your research and planning, and set the stage for highly successful future campaigns.


While proper planning raises the chances that your first campaigns will be successful, you need to be prepared for a lack of early results. Great digital advertising campaigns are built from historical performance data, which you won’t have in the beginning. It’s for that reason that your initial digital advertising budget should be an amount that you can afford to spend with zero direct results.


At the same time, it’s important to understand how budget affects a campaign’s ability to generate useful data. In PPC campaigns, every click generates a wealth of data. A click on an ad demonstrates that the ad’s targeting and copy are somewhat effective, and it gives you a chance to see how users engage with your landing pages, content, and service offerings. This holds true whether your digital advertising campaigns are deployed on Bing Ads, Adwords, Facebook, LinkedIn, or another advertising channel. Without funding in your budget, ads cannot run and generate this data. To build a useful data set that can be leveraged to drive positive campaign ROI, you should run these early campaigns for several weeks or months, depending on your budget. You want to generate a data set based on several thousand interactions with your ads, not a few hundred.


It’s for this reason that you should spend as much as you can afford to lose on your initial campaigns. Look at these campaigns as funded research that will fuel the success of your digital advertising campaigns for years to come.

Ongoing Digital Advertising Budgets

Once you’ve had your initial campaigns in place for a period of time, you’ll have a validated data set at your disposal. This data set will help you create ROI-focused digital advertising budgets that leverage existing data to drive exposure and lead generation. When our digital advertising services team operates a client’s campaigns, we put a lead attribution framework in place from the outset. This allows us to see how each campaign affects the client’s bottom-line goals, such as increased lead generation or average customer value.

By tracking the conversion rate, cost per impression or click, and lead contribution of each campaign, you can establish the ROI of each of your digital advertising campaigns. It’s at this point that you gain the ability to set budgets for your campaigns based on ROI and performance. Adjust your budget between campaigns, prioritizing those campaigns that are producing the most favorable results.

Once your initial campaigns have given you useful data to work with, you’ll also be able to change the way you approach setting overall digital advertising budget. You do this by comparing the cost per lead from each campaign with the average revenue per lead that those campaigns deliver. Ideally, your cost per lead will be much lower than the average revenue for those same leads. This approach ensures that your digital advertising campaigns are profitable for your business.

Improve ROI Before Increasing Budgets

Very few campaigns will perform at their maximum potential right out of the gate. Instead of shutting an underperforming campaign down, consider where it’s failing. As an example, a PPC campaign may be getting a high volume of impressions and clicks, but traffic from the campaign fails to convert at the landing page. Find these failure points, and test improvements to solve the problem. We recommend split testing campaign variants with one adjusted variable per variant to see how potential changes affect performance. Remember to allow these tests to run for a period of time so that you have a reliable data set to measure results from. By performing careful and consistent testing, you can often increase performance and ROI for a digital advertising budget over time, which will then allow you increase the campaign’s budget and reap the rewards of a successful effort.


When you set out to create your digital advertising budget, consider whether you’re creating a campaign to test your marketing strategy and build data, or whether you’re building a campaign based on existing performance data. If the campaign is an early test, spend only as much as you can afford to lose, but keep in mind that higher budgets produce useful data in a shorter period of time. If your campaign is based on past campaign data, use the projected cost per lead and average lead value from similar campaigns to set a budget that drives maximum results while remaining profitable. As campaigns continue to run, perform split testing to improve ROI, and increase budgets in response to successful tests.


Are you considering adding digital advertising to your marketing mix? The Risr Marketing team helps clients around the world create and deploy profitable digital advertising campaigns, driving brand awareness, lead generation, and revenue growth. To take advantage of our experience and accelerate the success of your campaigns, click the button below and get in touch with us.

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