Online store promotion: How to calculate the promotion budget and develop an effective advertising campaign

Promotion and promotion of an online store is one of the most difficult tasks for any entrepreneur. Now, when every day new companies appear and the tension in the market increases, it is very difficult to calculate how much money will be needed to create effective advertising companies and how much of these funds you are really ready to allocate for promotion.

An important factor in the cost of developing a website and creating advertising campaigns is the current market situation. The more popular website development becomes in a specific period of time, the more popular the creation of advertising companies becomes and the more difficult it is to create something more effective than what the competitors have. Also, inflation and quarantine measures, which constantly stimulate the market for website development and promotion, do not play into the hands of entrepreneurs. But is it possible to calculate the advertising budget and how to understand what to expect?

There are several methods for calculating the necessary advertising budget for your company, and we will talk about these methods today. But first, let's figure out why you really need to calculate the size of the advertising budget? There are several reasons for this, and none of them are related to the concepts of “expensive/cheap”. Any expenditure of finance for the benefit of the business automatically turns into an investment that correlates between "profitable/not profitable". The profitability or unprofitability of the development, which you have calculated in advance, can save your deposits and allow you to open a more successful business in another niche

In order to understand how profitable or unprofitable the development of a website or the design of an advertising campaign is, you must first consult a marketing specialist. It will tell you what indicators a particular advertising budget can bring, but this data, like everything that is developed and launched on the Internet, should not be taken as an axiom. Efficiency and final cost are affected by many factors, which we will also talk about in this article, let's get started!

How to find out the cost of launching an advertising campaign at the time of site development

Knowing how much it will cost to launch a particular advertising campaign is extremely important for a successful business, for obvious reasons. If you allocate a budget, without calculating all the risks and effectiveness of a particular idea, the resource will not get anything from your spending, whereas if you approach the site development and its subsequent promotion wisely, you can advertise more effectively, without " wasting money”.

There are many ways to calculate the real advertising budget and the cost of each individual advertising campaign, and we will talk about the most effective methods today. The list of ways to reliably calculate the cost of advertising promotion is as follows:

1. SRS — the fastest and easiest method of calculating the cost of advertising

Calculating the cost of advertising based on the cost per potential click, this is the fastest way to find out how much you will have to pay for effective promotion. You can find out this information using a specialized utility from Google, built into the keyword planner.

You can use Google Planner to find out the estimated number of impressions and conversions, as well as the cost per click for each individual keyword. This is useful, especially when the development of the site has just been completed, and there comes a time when you need to make a decision about its promotion.

Despite the fact that this method is the fastest and easiest to use , it has certain problems with accuracy. These problems are partially covered by the fact that the tool is free and you can check the information on the query you are interested in at any time, but unfortunately, you can not avoid problems with accuracy. The fact is that there are many factors that can change the cost of a click for each individual keyword in an instant, just as well as change the effectiveness of the advertising campaign you are checking. Summing up the results of this method of calculating the cost of an advertising company after the development of the site, the following pros and cons can be distinguished.

Pros:

• Using the SRS, you can quickly and efficiently calculate how much your advertising campaign will cost and the budget of what size should be allocated for its maintenance
• The Google Keyword Planner is free, so using the SRS you can avoid additional costs

Cons:

• To get data, you need to collect semantics, since this method is focused on it.
• This method calculates the cost in terms of advertising, which will attract representatives of the target audience 24/7, in practice, a very small number of companies require advertising around the clock.
• Despite the assurances of Google itself about the accuracy of this tool, in practice, the forecast you receive may have nothing to do with reality. The fact is that the final cost of advertising is affected by such factors as: the situation at the auction, holidays, the quality of the account and the optimization of the resource you have developed.

Summing up everything, we can say that this method, even if it is very popular — is still too unreliable, especially if your budget is limited and there is no room for error. If your business is currently in this position, we recommend that you take a closer look at the following methods, which have greater efficiency and accuracy compared to all your favorite SRS.

2. CAC and LTV as reference points for calculating the advertising budget

From less accurate methods, we will move on to more effective methods of calculating the advertising campaign after the site development. This method is based on the CAC - customer acquisition cost. When calculating the budget, do not confuse the CAC with the SRS. The CPC is the estimated cost of a single lead, whereas the CAC is the price per user who has already completed a target action, such as buying a product, and has made a profit for the company.

From the point of view of calculating profitability and non-profitability, this method is more effective than the previous one, and if you connect the LTV calculation of the customer's life value to the CAC, then you can get quite plausible data by performing the calculation. Making a calculation of the customer's life value is not as difficult as it seems at first glance, the Internet is full of all sorts of calculators. The main thing is to resort to the help of software from popular developers, because utilities with low popularity can have a high error.

As a result of using two indicators, you can get the final customer interest in purchasing your products in numbers, which is extremely useful information, especially if you have only recently developed and launched a website.

Despite the number of indicators in this method, as well as in the previous one, there is an inaccuracy, or rather the accuracy of the indicators depends on how well you set up your marketing company. From the pros and cons, the following can be distinguished -.

Positive:

• Accuracy in the calculation and the ability to find out the real interest of users in a particular product
• It is possible to independently set a limit on the cost of the client and plan spending based on the expected profit

Cons:

• In order for the cost of your advertising campaign to match the estimates — you need to perfectly configure your resource and optimize it during the development process. Otherwise, discrepancies are likely to radically affect the profitability of a particular advertising campaign.

3. Applied mathematics and Competitor analysis

To calculate the advertising budget, it is not necessary to use the CAC and the SRS. You can use the information that is in the air, namely, the data of your competitors. On the Internet, you can easily find services that can help you calculate the advertising budgets of your competitors. In this way, you will not only be able to use the data obtained for your resource, but also get an understanding of the investment in advertising of your direct rivals.

This method works according to the following principle:

1. Choose from hundreds of different resources to analyze your competitor's domain
2. Enter the domain on the service, get a list of keywords and an approximate number of ad impressions
3. Using the SRS, you study the cost of each individual keyword and add up the resulting figures - you will get an approximate budget of your competitor, which he spends on contextual advertising.

After receiving this data, you will be able to understand what budget you will need to promote your online store at the site development stage, which is very convenient. Thanks to this data, you can correctly plan the company's budget and direct your finances to the path where their work will be most profitable.

Not without its pros and cons, and in this method, they include the following -

Positive:

• There is no need to collect the semantic core and exclude negative words from it
• Using the example of competitors, you can find out how much money is needed for promotion and how much of it competitors put on contextual advertising. Based on this data, you can calculate the competitiveness of the website you have developed and decide whether to compete with these companies or not.

Cons:

• The accuracy of this method is not far removed from the use of the SRS. The reason for this was the use of the keyword planner from Google, which creates an error that does not allow you to accurately calculate the cost of each individual key and conversion.
• Analytical tools cost money and the waste on them should also be added to the total advertising budget, which becomes unprofitable against the background of rather low accuracy.

4. Calculation in terms of real sales

In 2019, Google announced a new tool that will allow you to calculate the costs and impact of advertising campaigns on the promotion of a resource. In addition to the utility from Google, there are also many other tools that can:

1. Tracking the effectiveness of the developed advertising campaign
2. Notification of changes in the effectiveness of an advertising campaign after manipulating its settings
3. Quick application of changes provided for in the original advertising campaign plan

Another method to get much-needed data is to turn to Google's already existing service, Google Ads. To get the data, you will need to create a new account in Google Ads and set it up properly-run the advertising campaign you have developed with a low budget. Next, the service itself will tell you the necessary amount of investment to increase the resulting result and will allow you to visually assess the profitability of this venture

In order to get the most effective and accurate data, we recommend that you carefully set up your profile and ads in Google Ads. If your ads are not optimized enough or your Google profile is not configured correctly — there is a high risk of getting inaccurate data, which can affect both the payback of site development and further profit.

Website development and effective promotion: How to get accurate data about the cost of advertising

Website promotion and promotion of online stores is something that no business on the Internet can live without now. Constantly growing competition forces entrepreneurs to make hasty decisions, which often leads to financial losses and further bankruptcy.

Website optimization and the quality of its development has a direct impact on the cost of further promotion and results. If you want to develop a website that can easily take top positions in search results-contact the specialists of the web studio Gloss. Our team will develop a website for you in accordance with all your wishes. In addition to creating an online store, our specialists can also optimize the future resource, in order to increase the effectiveness of further promotion and the relevance of the resource.

Also, the marketers of the Gloss web studio can develop effective contextual advertising campaigns for you, providing you with calculations regarding their effectiveness and final cost. Thus, you will no longer need to collect data yourself, doubting their authenticity, because professionals will do everything for you. Digital agency Gloss has been on the market for 12 years creating online stores and developing corporate websites, during this time our company has become the market leader in the development of web resources and does not plan to stop there.

If you want to learn more about website development in Vinnytsia, Kiev, Kharkiv and other cities of Ukraine-check out our article "Developing a successful business website: Its difficulties and nuances". You can also ask our specialists a question via an online chat located on the site page, or data from the "contacts" tab.

Entrust the development of the site and advertising campaigns to professionals and the desired result will not take you long to wait.