After doing the research, developing the content, choosing your platforms and finding the right people, it is time to think about the last, and one of the most important factors; budget. How much is this amazing strategy going to cost you? Let’s see how to best answer this question. Naturally the goal is to come up positive which means the money you make from the ad should exceed the money and resources that you put into it.
This involves considering the amount of money you are willing to pay per ad. Typically, if you choose an offline method or platform to run your ads or market your brands, you will receive an invoice or a quote and for the most part, what you see is what you pay, with some exceptions for certain fees and expenses. TV and Radio tend to be pricier, with channels worth advertising on running upwards of thousands of dollars for a short ad played a few times throughout the day.
For online channels, such as social media, the price per ad is dependent on a few things. Firstly, each digital platform has what is similar to an auction whereby you choose how much you are willing to pay per interaction. You can often pay per click, impression or conversion, depending on the platform. This means the price won’t exceed your pre determined max bid but will only actually end up paying one cent above the highest bid (as long as it does not exceed your max bid).
If you choose a mixed strategy, you will want to determine your monthly budget based on the actual value of a customer over their average lifespan within your product. The breakeven point is that point where you are generating as much as you are making when you determine the value of a customer.