Are You Wasting Your Small Business Ad Budget?

small business ad budgeting

You already know that you have to spend money to make money, but there are always potential pitfalls in that theory. For example, what if you are spending money in the wrong place? Not only will you burn through money, you will also lack the results you need. Instead of living this disappointing outcome, ensure that your ad budget is checking the right boxes.

The Many Components of A Budget

In the Inc. blog article “Advertising Budget: Tips on budgeting and negotiating, plus promotional tools for advertising,” small business owners are presented with a comprehensive guide to getting this budget just right. The details, and the pointers, are summarized and generalized below.

As always, start at the top. Know your most critical pieces of information before setting forth including:

  • The target customer: Who exactly is using your services and/or buying your products? It’s always helpful to put context to this with a target consumer profile to better “see” your customer.
  • The media: Depending on the above answer, your media mix should reach these ideal people.
  • The message: Will a rational or emotional appeal resonate best?
  • The ratio: In your best educated guess, what does a dollar of advertising look like in terms of expected results? You need this baseline expectation for your measurement bar.

Drilling It Down Further

According to the U.S. Small Business Administration, “the main ingredient for successful advertising is to pitch your products or services to resolve a customer’s problem.” Based on this, the SBA further advises that your ad budget should consider several things:

  • The time your customer likes to buy (and time your campaign accordingly)
  • A focus on popular items your customers want, not necessarily what you want to clear out of inventory
  • The benefits the customer will get from your product and/or service and highlighting this message in the right medium


So how much money should you set aside? This is up to you and it depends on how much money you have. The SBA mentions a couple approaches. One is a selling price/advertising ratio, meaning you are willing to spend more for the more units sold. Or, your business may choose to spend a flat percentage of your total projected sales revenues for advertising. However you do it, you’ll need to determine your timeline for allocating the money over the next year.

Advertising Media

Your advertising budget is highly dependent on what media you choose to focus on with the overall goal to reach the greatest amount of your target audience without wasting money. As a flipside, if you try to reach everyone (including the many people who won’t choose you), you will waste valuable resources in record speed. Instead, follow your customer to where they live and invest in enough frequency to stay in front of them. Whether or not you choose continuity (steady levels throughout a set time period), flighting (aligning with hot demand zones for your product) or massed (specific periods like holidays), you need to determine what is best for what you are trying to say.

Online media is obviously a huge player in your ad budget in today’s world. There are so many outlets to utilize your budget, with some considerations below.

  • Search engine optimization: Simply, you have to invest in SEO if you want to be found online. It’s crucial to spend the right amount of money here to improve your rankings, build your brand visibility, and increase sales.
  • Social networks: It would be incredibly overwhelming to invest in all social media sites, not to mention how much it would drain your money and time resources. Instead, pick the top spots that reach your target audience and spend your allotted budget in the places that make the most sense.
  • Online video ads: This may seem surprising. Don’t people detest video ads? Not if they are worth watching. Make these videos fun with a “shareable” element to them that will go the distance.

Budget Discounts

If your small business is on a tight leash with expenditures, this article highlights some areas that may allow you to save money in your budget. A handful of this long list is detailed below.

  • Mail order discounts: If you rely on mail order advertising, get discounts from the magazines.
  • Per Inquiry deals: Some spots will allow advertisers to only pay for the spots that lead to sales.
  • Frequency discounts: If you are willing to commit to several ad spots, you’ll likely get lower rates.
  • Stand-by rates: If you like spur-of-the-moment availability, consider standing in line for airtime with deep discounts.
  • Barter: It’s not uncommon to see trades for ad space for products and services.
  • Don’t Forget the Promotion


Sometimes, advertising can only go so far. If you need more help in reaching your target audience in meaningful ways, consider a public relations team that can get your big message in the right places, or ramp up your sales promotion strategy if it’s numbers at the register you need. Either way, the key to being visible is putting your company out there, so it’s time to step on stage!

What parts of your ad budget have been the most successful? What investments have been duds? Let’s talk!


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