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How Much Should I Spend on Paid Media per Month?

November 05, 2020

Paid media spend is different for each business. However, there are certain formulas you can use to help give you a solid place to start from.

At Boom, I get many questions from my clients about how much they should spend on paid media each month. Is £1300 enough? Is £900 too little? Well, I thought, why don’t I make a blog advising you on how much we think you should spend?

With the nature of paid media, no two situations are the same. For example, company A might spend £1500 each month, whilst company B might spend £950. It is going to take some time to learn how much you should spend on your paid media, but there are certain formulas to help give you a good basis on how much to invest.

Knowing the right amount to spend on paid media all comes down to metrics. You should start by answering this question: How many leads do you wish to acquire a month? Not only should you answer that question, it's also important to consider the following questions as well:

  • How many leads do you want to achieve a month? 
  • How much do you wish to pay for a lead? The B2B industry benchmarks for the following platforms are as follows:

      • Google Search Ads Average CPA: £89.85
      • Google Display Ads Average CPA: £100.86
      • Facebook Ads Average CPA: £18.39
      • LinkedIn Ads Average CPA: £58.03
  • Which platforms do you want to promote ads on?

Now that you have your goals, use this simple formula to figure out how much you should spend each month:

Maximum cost per lead x target number of leads
=
Recommend total budget for the month

Depending on whether you have HubSpot, once you have your formula, you should then look into your portal to assess what your current average lead to customer rate is. This gives you an idea on the bigger picture in terms of ROI; how much of the money you invest in and spend, and how it will pay off.

This is where you will need to define how much revenue you want to generate against what your average order value is.

To work out your ROI percentage, here is the formula you should follow:

ROI = Gain from Investment - Cost of Investment
              Cost of Investment

It is going to take some time to learn how much you should spend on paid media. However, the calculations above will roughly guide you to knowing how much money you need to invest to expect the results you want to see.

Best practice is to start small and then scale up as your paid media campaigns get optimised for success. Remember, don't allocate all of your budget into paid media from the onset, it is a strategic process which should be monitored closely throughout. If you would like further help with your paid media, contact us.

To find out how paid media fits into your overall marketing strategy, download our infographic, The Anatomy of an Effective Multi-Channel Marketing Campaign, below.

Download Now

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