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Old 02-20-2018, 02:31 AM
redmonkey redmonkey is offline
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How much to spend on ads?

HI,

will really appreciate some advice. Right now we have several sites that are promoting and selling our software for webmasters. So we are doing monthly around xx xxx USD but we simply spend 0 on paid marketing right now. All orders comes from organic results, content marketing and from good reviews. The main problem is that sales are on same level for last 2 years.

We decided to boost our growth with spending money on attracting new customers. So for now we want to focus on Adwords and Remarketting ads on Facebook advertisement.

So main question for now. What part of our sales we should put on advertisement? What ROI we could expect in average?
 

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Old 02-21-2018, 02:46 AM
Julia Sta Romana Julia Sta Romana is offline
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You can make a rough estimate of how much you need to spend on advertising by first setting a goal on how much you want to increase in sales. The rule of thumb is that your sales target should cover the advertising expense plus and additional expenses you would incur by increasing sales. So if your goal is to have a increase in sales by $100,000 and you estimate to meet that increase your have to spend $50,000, this means you shouldn't spend more than $50,000 in marketing to break even.
 
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Old 02-21-2018, 03:08 AM
redmonkey redmonkey is offline
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Dear Julia Sta Romana, thank you for your answer.

I just want to clear situation. We are selling software so additional sales has very low additional expenses. We are bootstrapped so we don't have a lot of money to spend on advertising. Does some golden rule exist on marketing budget? How much of our sales we should spend on promotion digital products on competitive market?

The main concern for me is that what ROI is realistic for Adwords and Remarketing adds. We have several sites and remarketting audience of around 30 000 visitors interested in our niche. Average order amount at our sites is 150$ and average CPC is 1-3$.

Right now we are starting our Adwords campaign after long break. We had very low sales from PPC advertising last year and now we are trying to do everything right.
 
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Old 02-21-2018, 05:19 AM
rajkumar321 rajkumar321 is offline
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small businesses earning less than $1 million in annual revenue it should be spend about 7-8% of that revenue on marketing on your business
 
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Old 02-22-2018, 01:33 PM
donaldgreeve donaldgreeve is offline
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SBA recommends 7% - 8% of your gross revenue for marketing and advertising if you're doing less than $5 million.
 
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Old 02-22-2018, 01:42 PM
redmonkey redmonkey is offline
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Thank you for you advice. I think we will stick with SBA recommendation.
 
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Old 02-22-2018, 10:13 PM
kiruthi_18 kiruthi_18 is offline
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Thanks for discussing about how much money to spend on ads. I got some ideas from all your advice. It will helps me for run ad campaign. After a long time i will restart ad campaign with some idea.
 
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