A Paid Media Budget Broken Down

How to Determine a Paid Media Budget

By Brandon ZingaleOct 5 /2021

Every paid media strategy needs a budget, and using paid media can be a great supplement to the rest of your marketing initiatives. So, how do you determine how much you should spend on paid media? Here are some things to consider.

Let’s start at the beginning. Having a paid media budget, like everything else you have a budget for, can help you determine the ROI for the tactic.

First thing’s first, there’s no one-size-fits-all advice when it comes to determining a paid media budget. But when getting started on determining your budget, it’s helpful to have a complete picture of your cash flow. Once you have an idea of what you’re working with, it can be helpful to reevaluate your budget and see if you can allocate some of it for paid media use.

Regardless of how much you decide to put toward your paid media budget, it’s important to experiment with different opportunities.

What Paid Media Channels Should I Use?

Paid media is much more than Google Ads. It includes:

  1. Paid social
  2. PPC & Google Adwords
  3. Retargeting
  4. Display and native ad networks
  5. Niche or industry publications

Each of these channels comes with different costs and should be used under different circumstances. Let’s look at when you should use each.

1. Paid Social

Paid social includes channels like LinkedIn, Facebook and Twitter. Since 2019, the amount of money spent on ads for these social channels has been steadily on the rise. Traffic from organic social media campaigns can take days to build. Paid social takes that waiting away. Plus, it allows you to retarget your audience with your ads.

Paid and organic social strategies work best when used together because they allow you to reach your current audience and expand your reach to a broader audience.

Paid social also lets you:

  • Break through restrictive algorithms on social platforms
  • Reinforce the message you promote organically
  • Precisely target consumers you want to reach with audience targeting

As organic reach continues to plummet across most social media platforms, paid social helps you reach a broader audience.

Paid social can be a good choice if you’ve got some content that you want to leverage or want to target a specific consumer demographic.

2. PPC & Google Adwords

PPC is a way to advertise on search engines. If someone searches for your product or service, an ad for your company will be included at the top of the results. You bid on the keywords you’d like your ad to be associated with and you pay a fee each time your ad is clicked. Google Ads is Google’s version of PPC. Each PPC campaign is built around a keyword list.

Your SEO efforts and PPC can help connect you with an audience looking for your services. PPC is good for getting your brand found quickly and getting in front of customers immediately without waiting for your SEO efforts to take effect.

3. Retargeting

Retargeting uses paid ads to retarget customers who have visited your site or social media profiles. Retargeting also allows you to reach new prospects. For example, if you’re looking to grow the number of leads you get to your nail polish business, you might consider using lookalike audiences to target those users who visit your competitors.

4. Display and Native Ad Networks

Display ads show up alongside content your audience is consuming. That means if someone is reading a news article on NPR, for example, an ad for your content, product or service would show up under or near that article on the NPR site. While native ads are similar, the difference is that these types of ads blend within the content the consumer is viewing.

Both display and native ads work best for building awareness. So you want to ensure your ad doesn’t require someone to convert. A piece of content or video is a good choice for these ads.

5. Industry or Niche Publications

If you know your audience reads certain publications — like Becker’s Hospital Review, for example — it may be helpful to sponsor content or buy ads in these publications. This tactic is also useful for building awareness.

To start, you should focus on one to three channels for your paid media strategy and choose the channels your customers or potential customers are using.

Paid Media Costs to Consider

Paid media strategies encompass a lot more than simply buying space on your channel of choice. You need to allow time (and/or money) for strategy creation, graphic design, writing, editing and analytics.

When creating a paid media budget, consider what your new customer goal is each month and how much you’re willing to spend for each new customer (cost per customer acquisition).

Additionally, you’ll want to figure out:

  • The lead conversion rate of your site
  • The number of leads you need to get per month to achieve your new customer goal
  • The number of ad clicks you’ll need to hit your goal (how many people need to click on your ad and take the desired action); and
  • How many ad impressions you’ll need.

If this all seems really daunting, you might want to consider an agency partner for help through the process.

The New Demand Generation

The Author

Brandon Zingale

Brandon sets measurable goals for clients and helps them achieve them through a social/paid strategy based on conversion optimization and brand awareness. He has more than eight years of experience in the social media realm and has worked with Fortune 500 companies such as Verizon, Wells Fargo, Coca-Cola, Domino's Pizza and many more. Brandon holds a Bachelor of Arts in Strategic Communication.