We must spend our money wisely, or the finance teams holding the purse strings will not grant us a marketing budget for next quarter. And so, we are mindful of our investments. A few words of advice from a marketer with 10+ years of experience shattering hyper-growth targets at venture-capital-backed startups. Work with what you’ve got, and ask for what you need; but don’t skimp on the creative. If the retailer can hear your brand voice in your ads, and they feel something, that’s the sign of a good ad. More on that later. For now, let’s get to what you came here for.
What’s a good ad budget? How much should I invest?
The truth is your strategy - and success - depends on whether you’re launching a product as a familiar brand, or stepping onto the scene as a newcomer. Here’s the kicker: acquiring a new customer costs about 7 times more than it does to engage one who already knows and loves your brand. Keep that in mind as you’re preparing to request dough.
It takes an average of 3-8 touch points to convert a retailer into a customer, and that means your campaigns need time to work their magic. We recommend running campaigns for at least 3 months – for sustainable growth.
Note: that we will not be giving you flash-in-the pan, make-money-quick advice. There are plenty of schmucks on the internet willing to do that. We play the long game here at LeafLink, and want you to rise with us.
Once you know your target markets and the products you want to promote, it’s time to do some math. It doesn’t need to be complicated, even if some people in the industry make it seem that way. Ask yourself: how many retail customers, or total sales, do you need to reach your goals? Identify that. Then do some backward math.
For example:
You need to make $40K to hit your quota.
10 sales, at an AOV of $4k, rack up to $40,000
Assuming your conversion rate = 10%
Your lead goal = 100
Assuming your conversion rate = 10%
Your awareness goal = 1,000 retailers
How much should you invest to reach that goal? It really depends on how good your ad creative is at converting retailers into customers. You can experiment your way from good to great. More on that later.
Here’s a neat framework to get started now.
Set a monthly budget. eg $1,000
Set your weekly max budget. eg ¼ of that
The Average Order Value on LeafLink = $4,000 on LL, so make each interaction count!
Note: These conversion rates are the rocket ships, used to demo the easy math version of this formula. Most B2B ads convert at ~3-10%. You could be on that rocket ship with crisp, craveable ads.
On a very practical note, the LeafLink Ads Manager experience is an auction. You’ll see the going bid for your market on the screen. Think competitively. This is an auction. How much wiggle room do you have in your budget? Bid higher than what you read on the screen to have your products seen more often. Start at a nickel higher and see how it does. This is a B2B marketplace. Most retailers place orders on a biweekly cadence, and the algorithm is learning how retailers react to your ad, so don’t plan on editing a campaign or product listings for at least 30 days. It’s going to be hard to not fuss with it. But leave it be.
Take what you learn in your Ad Insights report to modify your brand presence and the ad creative. If you do it right, your ad will shine like a beacon, illuminating the path to your store. And your dollars will go forth and multiply.
Budgeting and Bidding Strategy Best Practices
