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How to plan the budget of a digital advertising campaign?

Planning, as said has always been the first step of a successful digital advertising campaign. Determining the marketing budget for a campaign or a whole business is a very important part of our planning.

How often have you heard or said the phrase “Do you know what your marketing budget is?” and got the usual answer “We have no idea!”. People are usually clueless about how to calculate their digital marketing budget and set adequate targets and KPIs.

Calculating the correct marketing budget and the thresholds that will make a campaign successful is vital for every marketer and digital business owner. Figuring out the so-called “marketing math” is a simple and at the same time daunting task. 

In order to explain this process and simplify the basic calculations, we have created an effective, easy, and 100% free to use tool that will help you calculate digital marketing budgets & plan campaigns.

Whether you are a newbie to digital marketing campaigns or an experienced marketer we think that the tool will be useful for you and will definitely save you lot’s of time. It will as well make you think about some important factors while planning & budgeting.

Watch the step-by-step explainer video to understand exactly how to use it in practice:

 

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Definitions of marketing terms used in the tool

Impressions

 An Impression occurs every time your ad is loaded on a page.

 

Clicks

 A click is counted every time a user clicks on your ad

 

CTR

Click Through Rate. This metric represents clicks divided by impressions. It is one of the most important metrics in the digital marketing world.

 

Cost

The cost is equal to the total money spent for an ad or a campaign for a given period of time.

 

CPC

Cost per Click. This is clicks divided by cost. Similar to the CTR the CPC is an indicator of the quality of your ads. It is a metric of how much does it cost you to get a visitor from a given audience. However, CPC should not be considered on its own. It should be related to other metrics like the Conversion Rate and Conversion Value.

 

CPM

Cost per Thousand Impressions ( short from “cost per mille”). The CPM shows how much you are paying on average for your ad to receive 1000 impressions. It is also sometimes an alternative bidding method to CPC depending on your objective.

 

Cost Per Conversion

The cost per conversion is equal to the cost divided by the conversions. It is important to note that this is not always the same as the CPA because a conversion can be different than a sale. For example, it could be a lead.

 

CPA

Cost per Acquisition (in our case, sometimes it is used as Cost per Action)

 

Ad Conversion Rate

Conversions divided by clicks. Note that not all campaigns are intended to result in conversions. The person can see an ad, visit your website (click or landing page view), and then leave without converting. But once he considers your value proposition he can come back and buy it directly without clicking on an ad.

 

Conversion Values

You can assign any value to any conversion on your website. Typically if the conversion is a sale the conversion value is equal to the price.

 

ROAS

Return on Ad Spend. The return on ad spend is equal to the revenue or total conversion value divided by the total ad spend (also known as Cost)

 

*Disclaimer: We made this tool entirely free for everyone so we can help you save time. If you think that it lacks something or have any other comments we would love to receive your feedback 🙂 

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