How to plan and optimize your advertising budget?

What is an advertising budget?

A company's advertising budget means the amount it plans to allocate to promoting its products or brand. As such, it forms part of the marketing budget. Established over a given period (generally a year), this budget includes all expenses directly or indirectly related to your advertising campaign :

• Fees paid to the agency responsible for designing the advertising strategy;

• The cost of advertising ;

• Etc.

The amount can be vary according to the nature and objectives of the advertising campaign . Naturally, it also varies according to company size. Generally speaking, the advertising budget is expressed as a percentage of sales.

Why plan your advertising budget?

Anticipation is the lifeblood of any business, especially when it comes to expenses. Setting an advertising budget in advance enables a company to anticipate your advertising expenses to better plan your overall budget.

In addition, planning the budget allocated to advertising is also a way of reflect on the objectives and details of the advertising campaign. You need to determine in advance :

• Size of target audience;

• The number of channels ;

• Campaign duration ;

• Etc.

And finally, setting a budget is also a way of cap your expenses . Without a pre-set limit, you run the risk of lose control Conversely, if you don't set a budget in advance, you run the risk of not having enough money to run your campaign. In both cases, you run the risk of not achieving your objectives.

How do you determine your advertising budget?

Determining your company's advertising budget requires you to take a number of parameters into account:

Fixer vos objectifs marketing

Your marketing objectives must be in line with your company's marketing strategy. There are several possible marketing objectives for an advertising campaign:

• Improved brand awareness :

• Brand loyalty ;

• Generating repeat purchases;

• Acquiring new customers;

• Etc.

Each marketing objective corresponds to specific advertising actions. The choice of advertising channels and the size of the audience to be reached also depend on the marketing objectives chosen. They are therefore decisive in determining the advertising budget. Creating your advertising campaigns

Once you've decided on your advertising objectives, you can start communicating:

• Are you going to do it in-house or call in a specialist agency?

• Which advertising formats to choose?

Once again, all these technical details will an impact on the advertising budget. You also need to consider the design, the tools used, the recommended graphics, and so on. Nothing should be left to chance. Even the smallest detail will have an impact on your budget.

Choice of advertising channels

Choosing the right advertising channels, media and tools also comes into play to determine the budget required for your advertising campaign. Each medium or channel has its own cost:

• Do you prefer digital advertising or more traditional media?

• Is it a media or non-media advertising campaign?

The choice of channels depends on the marketing objectives you wish to achieve. For example, for a campaign with a visibility objective, advertising on social networks Such a choice is bound to have an impact on your advertising budget. Tracking results

Once the campaign has been launched, you still need to manage the advertising budget . You must keep an eye on the performance of your advertising campaign through relevant key performance indicators (KPIs).

On the other hand, such tracking also provides you with information on which to base your future advertising strategies and the corresponding costs.Among the possible indicators, you can, for example, track ROAS (Return on Advertising Expenditure), CPC (Cost per Click) and ACOS (Advertising Cost of Sales).

You can also rely on tools such as Google Analytics, Google Ads or Facebook Business suit (for Facebook ads).

How can you control your advertising budget?

Here are our tips for controlling your advertising budget:

Aim for a specific target

The most common mistake is to aim at a target in all directions. In this case, traditional media such as radio, newspapers or television are used. However, the costs of this kind of large-scale advertising campaign can be very high. important .

The more precise you are about the target you want to reach, the more you can limit your costs. Digital advertising tools such as Facebook Ads or Google Ads enable you to choose precise targeting criteria :

• Age ;

• Geographical location;

• Etc.

This type of channel not only allows you to limit your costs and maximize the impact of your advertising.

Stand out through originality

Big companies can afford to hire stars for their commercials. That's normal, because their advertising budgets can run into 9 figures. An SME just starting out can rely on originality to make a lasting impression . Humor and originality are ingredients that often work in advertising.

With a good dose of originality, you've got a chance of creating a buzz and getting people to remember your brand.

Use customer reviews

Soliciting positive feedback from your satisfied customers is the key to success. a great way to advertise for free . Ideal for small businesses with limited advertising budgets.

Capitalize on new advertising platforms

Traditional media aren't as relevant as they used to be when it comes to advertising. Especially if you have a limited budget. Social networks like Facebook Ads, Google Ads, Youtube or Tik Tok are becoming the new platforms of choice. Of course, distribution depends on how much you pay. Nevertheless, your campaign still has a good chance of being seen.

In addition, there are other innovative platforms proliferating on the Internet. Little Corner, for example, offers to display your advertisements on bistro tables, in toilets or on pizza boxes.

Local targeting

Limiting yourself to your own region or department is often a good way to limit your advertising budget. Broad targeting can be a risk for a limited budget, especially when results are not guaranteed. How much do companies spend on advertising?

A company's average advertising budget depends on a number of factors. Size plays a key role. For example, the advertising budget of a multinational can be billions of euros. This is how the Coca Cola was estimated at $3.9 billion in 2016.

On the other hand, according to a INSEE study the average advertising expenditure of French VSEs/SMEs is :

• 5,000 for companies with 1 to 4 employees.

• 10,000 for companies with 5 to 9 employees.

• 20,000 for companies with 10 to 49 employees.

How do you finance your advertising budget?

It's now clear that financing the advertising budget can sometimes be a problem for a company. Especially when it comes to VSEs and SMEs.

Our payment solution Hero has been precisely designed to meet the challenges of this type of business . Hero permet de deferred and instalment payments . Such payment facilities are a godsend for any company wishing to invest in advertising while controlling cash flow.

By choosing Hero as your payment solution, you can pay your advertising agencies on social networks or other platforms in 3 or 4 instalments . You can also defer payment and wait 30 or 60 days to pay.

These two options help you optimize your cash flow and keep your working capital in check. So you can keep better control of your advertising budget.

In a nutshell, the advertising budget encompasses all expenses relating to your advertising investments. Setting it in advance gives you greater control over your overall budget and enables you to plan all the details of your advertising campaign. Financing your advertising budget via Hero allows you to optimize your cash flow.

Other articles on the same subject:

• How can you improve your company's cash flow easily?

• Rolling forecast: what is it and how to use it?

• 30-day payment: extend your payment terms