SHOW NOTES

This is a common marketing question new + experienced business owners ask: When Do I Increase My Ad Spend?

I have the answer for you, but it’s a bit more complicated than “Increase your ad spend when…”

The reality is, every business has different needs and budgets, but there are common mistakes I see people making when scaling their ads.

Many people get in a rut with only spending $5 to $10 per day… then they don’t increase their ad spend because*surprise surprise* they’re NOT seeing the sales.

BUT!

That doesn’t have to be you!

In this episode, I’m walking you through:

  • How MUCH you should be spending
  • When you should increase your ad spend.
  • Which numbers you NEED to track through the entire scaling process
  • Why you shouldn’t put everything into one ad

Tune into this 24-minute episode for my complete answer to the question, “When do I increase my ad spend?”

And then hop over to Instagram (@emilyhirsh) to share your comments + questions inside our latest post!

If you want support with paid ads (and suggestions for impactful content marketing, too!), head to HelpMyStrategy.com to apply to work with Team Hirsh!

 

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Emily Hirsh:

Hello everyone. Welcome back to the podcast. Welcome. If you’re new, hope you’re all doing fabulous. I am having a rocking week. I’ve had a really good month, actually the last, I don’t know, a month and a half, which is crazy because it’s been such a crazy time in the world. So I feel really grateful that my life feels so great right now and I feel so happy. And it’s resulted in just more time with my family and my kids. There’s been something for me about having the third child, which we know as our last baby, like 100%, and appreciating the experience more, of the newborn phase and, just having that tiny baby in the house, which can be very difficult, but knowing it’s your last one, it’s been a different experience for me. So, that plus our company is doing amazing and growing with a very, very high retention rate, we made a hundred percent in the previous month and then like 97% the month after that.

So I’m super proud of that and I just feel like everything is exciting right now. And I have a nanny back with everything that happened with COVID and we have some house help back, which is nice. So it’s definitely a new normal. I actually realized after all of this that I had almost too much house help and I wanted to scale it back a little bit. So that was kind of eye opening for me that wouldn’t have happened without COVID and it’s been good.

Anyways, today I want to talk about when do I increase my ad spend? I got this question and I actually thought it was an amazing question because there’s two reasons that you would increase your ad spend. So it was on a webinar and somebody asked me, I’m only spending $10 a day. Should I increase my ad spend or should I wait to make sure my ads are profitable before I spend more? And it was a great question because in some cases you should increase your ad spend before you for sure know that everything’s working and that you’re technically scaling. And so there’s two reasons that we would increase the ad spend. One would be to drive more people through a funnel faster, especially in the beginning when you’re testing a new funnel, there’s not a lot you can do with a five, $10 a day budget. I mean, $10 a day is like $300 a month. It’s going to take you, you know, if you sold something for a thousand dollars and you spent $300 a month, if you sold one in the whole month, then you’d be well over profitable. But it’s going to take, like, you might not even sell one because that would be a pretty good conversion. So if you spend that little, it’s going to take you, you know, six, eight weeks to actually see any traction, which is just a really long time. And it can also feel really defeating.

So my suggestion is that you try to have at least a $1000 a month, at least $500 but ideally a $1000 like if you have $500, you can get some momentum, but it’s just still very, very low. So we tell our ignite students to have at least $500 a month of ad spend budget. But then our clients, it’s $3,000 a month because otherwise the management fee doesn’t make sense if you’re not spending a lot because you just can’t get that big of a return. And so there might be an opportunity where if you’ve been running ads at a very low budget, you know, $5, $10 a day and you don’t know yet, you’re like, I’m not sure if I’m seeing the results that I want to see and if I can actually like “scale” my ads because it’s profitable, there’s still an opportunity. And my encouragement would be to increase your ad spend to that thousand dollar mark to just get a lot more traffic through that funnel and seeing your ads and then really seeing if it’s working or not.

So my suggestion is you do that and you see that $1000 as a testing budget still. Like, I might not make this back right away. I’m spending this $1000 as an investment and I’m doing it because I need to get as much traffic as I can to see my ads and sign up for whatever my ads are sending me to, sending them to, and see how many people are buying so that I can find any holes in, in my marketing and in my funnel and in my paid ad strategy. So if you’re spending that $1000, you’ll get that traction so much faster. But it’s still seen as that testing budget.

So that, that’s something that I don’t think a lot of people talk about because this woman on the webinar asked me, she said, I’m spending, you know, $300 a month. I think my ads are doing okay, but I haven’t really gotten sales yet. Should I increase my ad spend or should I wait until I get, and I just thought that was such a great question because if you spend little and you’re waiting for that moment to know like, yes, it’s profitable and that means, you know, I can increase my ad spend and you know, I’m seeing that ROI. If you’re spending $300 a month or less than that, it could take you two months, even three months to know that. And it’s so hard to know because the traffic is so little. So that’s one instance where you would consider increasing your ad spend.

If that’s your current situation where you’re spending so little, you’re not getting a lot of traction and you need to speed things up and then you see that as an investment. And you know, I may not make this back, but this is my investment into testing my data and testing my funnel and figuring out what is working and what isn’t working, then I’m going to fix it. And then hopefully I’m going to increase my ad spend even more. Now you can have a testing budget even more than a thousand dollars. I also want to make sure that’s clear. Oftentimes we will do a $3,000 testing budget. So if you have, if you have the ability to do that, my recommendation is even higher. So in my own company, first of all, we tell our clients a minimum of $3,000 a month, and that’s even our performance clients.

So if somebody has a new funnel, we’re recommending about $3,000 a month. Some people do like 2,500 if it’s a brand new funnel. But again, it’s so hard to get the traction to make our work that we’re putting into the ads worth it if you’re spending less than really $3,000-2,500 now me, like we just did a webinar that was brand new, let me see in March and what I specifically say, let’s just spend $3,000 and see what happens. So that was my testing budget. So you can have a higher testing budget. I would say between $1,000 and $3,000 is good. I mean, I wouldn’t say like a $10,000 is a good test, any budget because that’s just like, you know, if, if it fails, that’s a lot that you put out. But one to $3,000 feels like a pretty good, um, testing budget.

And you know how the more you put in and the more data you’re going to get and the faster you’re going to get to the place where you’re like, this is converting. And I can actually intentionally scale this and I know that my, my funnel is profitable. So if you’re spending less than $1,000 a month and you haven’t increased your ad spend because you are waiting for that green light of like, my funnel is profitable and it’s converting, then my recommendation would be raise your testing budget to two $1,000 to $3,000 a month. Now when you do this, and no matter what, no matter what your testing budget is, remember the most important thing that you have to do while you’re testing it is track your numbers. Track every important metric. And I’ve done a lot of podcasts on reporting. I recently did one called reporting transparency.

The key with it is that you are tracking your numbers not just in the ads but in the entire funnel. So if you had a webinar funnel, you would have metrics on the cost per click of the ad, the cost per webinar registration, the landing page conversion, the webinar show up rate, the sales conversion, and then your total ad spend and your ROI. Those are like the major metrics. You might have some more in there, but you would be tracking all of those and ideally tracking them against a goal. So if you said, I want to get $5 webinar registrants and you’re getting seven, you might know, okay, I could either try to get this down or I have to adjust my goal. So no matter what, when you’re testing it is still never a time to just be like, let me throw this budget of $1,000 out there and see what happens. And just like throw it out there. And then if I make a sale, I’m successful and that’s my metric to determining success.

Instead you have metrics tracking every step of the funnel so that when you spend that $1,000 dollars and you get the data back about the webinar registration costs and about the show up rate and about the sales conversion, you know where the problems are and you know what is and isn’t working. So that is, that’s the most important part. If you’re in that testing phase or even if you’re in this next part I’m going to talk about which is scaling. If you’re in either of those places, you have to be tracking and ideally tracking against a goal.

So here would be a scenario where I would say don’t raise your budget. So let’s say you are at, you know, low $300 a month ad spend. You listen to this podcast and you’re like, Oh, so I could increase it to $1,000 to increase my testing. But if you’re tracking your numbers and you know you’re paying like $3 cost per click on your ad, so for someone to click on your ad is costing you $3 then you shouldn’t raise your budget because you already know that’s way too high. Like you want your cost per click to be at least under $2 ideally under a dollar would be amazing. You want it to be at least under that $2 so if you’re paying $3 cost per click and you’re thinking about increasing your testing budget first, you should solve that problem because that’s an obvious like critical thinking, red light of like, well, even if I raise my testing budget to get more people through my funnel, there’s something broken because just to click on my ad is not converting where it should, which means either my targeting or more likely my messaging needs help.

Or maybe it’s because my offer needs help because what I’m having them sign up for is not enticing enough. So you’d fix that first, then increase the testing budget. But, this lady on the webinar, she was getting a good cost per click and a good cost per lead, but she wasn’t seeing a lot of sales momentum because she was only spending $5 to $10 a day. In that situation, definitely raise that budget, increase that threshold for that testing budget because you know you’re going to be a good cost per lead in a cost webinar registration. So now you need to see if the webinar itself works, which the only way to do that is to get as much traffic as you can through the webinar. So that is when that is a situation where you would say, I need to increase my ad spend. If you really need to drive more traffic, and that very first step is working, which is clicking on the ad and signing up for whatever free thing you have. If you’re doing an optin, then the next thing is getting more traffic through because it could take her two months to figure out if her sales conversion is good. It would just be really slow and it’s hard to sit on that for that long.

So the second one in REO that you would increase your ad spend is if you, everything is working and you’re in a scaling phase, so you’re like, okay, my cost per lead is good, my cost per webinar registration is good, people are buying, but I’m only spending a thousand dollars a month. Now you have the justification to actually scale your ads. We typically recommend scaling 25% every week of your current budget. Now this varies because sometimes you can scale more and in many cases we’ve scaled a lot faster because we’ve had clients, like we had one client who we took from a $0 ad spend to a $100,000 a month ad spend within like six weeks because he wanted to scale that fast and we were able to do that. Sometimes that means uh, being okay with a higher cost per lead or cost per result if you’re going to scale that fast, but so typically we say 25% per week, but that does vary.

Now the important part when you’re actually scaling is that you’re still paying attention to those metrics. So there’s going to always be a theme here that like tracking and the numbers is the most important thing. Because without that you can’t make decisions to know if you’re scaling threw things off. If it’s working, if you should do more, if it messed up a metric, if it lowered the quality of your audience. If you need new ad creative, like all of those things are going to come up when you start scaling your ad spend and the only way to know is to track your metrics and so let’s say I am spending $3,000 I increased my ad spend by 25% one week and then I, my cost per webinar registration goes up. Most likely that’s because you need new ad creative because when you’re scaling you need more variation in the feed to basically meet the demand of all the ad spend that you’re spending.

You can’t really put everything into one ad. It just goes stale. What we’ve noticed in the last, really I’d say one to one and a half years is that Facebook wants to see constant new creative. It wants the feed to constantly be fresh. When I first started Facebook ads, like five years ago, you could leave an ad on for months and it would work. And there are some cases where that is true still, but in, in all of our accounts where we’re spending big and we’re scaling, I mean really in all of our accounts, we’re at least refreshing our ad creative once a month. And that doesn’t mean you turn off what’s working. It just means you’re adding something and you’re putting some budget towards something new. So let’s say I’m at $3,000 a month and I want to increase my ad spend by 25% one week.

So instead of just putting that new budget into what’s working, I might launch a new ad in a new ad set or a new campaign or something, and then I might maybe raise the rate, maybe raise the price a little bit on my other ones, but I’m also launching that new ad so I can start putting budget to it so that when my other ads saturate and they stop working, I’ve got another ad that’s like my backup and I don’t like fall down. A common issue people run into with scaling is they put all their budget in a few ads and they scale and they scale and they scale. And then that starts to go up and up and up in price. And then they have to eventually turn it off. And then they’ve got this ad where they’ve scaled it. So they’re spending a lot of money in one day and they have to turn it off.

So that sets them backwards and now they’ve got to get another ad back to that level. So that’s why launching new creative is really helpful when you are scaling as well as knowing those numbers. And here’s one thing with tracking your numbers. When you’re in this phase of increasing your ad spend and scaling because everything is working, you have to make sure you’re watching. So one thing we track in our tracking sheet is we’ll look at yesterday’s data and then we’ll look at the overall three-day average and the seven day average. So our sheets are automatically calculating one day, three day, and then the whole month average because if you just actually one day, three day, seven day and the whole month. So if you just look at like let’s say the last seven days or the last 30 days, your data is going to get really skewed because you’ll miss the times where it starts to go up in cost.

By looking at yesterday and the last three days of your data, you’re able to see what’s happening. So let’s say I was getting a $5 cost per webinar registration consistently and I was like at $5 you know $4.80, $5.20 like it was right in that range every single day for the last 30 days. Now I’m scaling my ad spend. So I meant adding 25% of my budget and let’s say my seven day average still stays like kind of in that range, but my three-day spikes up and it’s at like $7 now. So if I wasn’t looking at that closer window of data, then I wouldn’t notice that it was starting to climb. It was like $6, $6.50, $7, if I was looking at a bigger window of 30 days or the last even seven days, I might miss that and several days might go by until I realized that climb.

The goal is that you catch that before it really starts spiking so that you’ve got backup measures, new ad creative, new audiences, new ad sets, whatever it is, ready to go so that you’re scaling doesn’t slow down. So hopefully I didn’t just lose you with a bunch of technical, I think people who are in the scaling place in their business will understand this. But I really loved this question and how it was asked on my webinar because I’ve never talked to someone directly about making the decision to increase their ad spend even when their results didn’t justify it at that moment in terms of sales. But I think a lot of people start out ads very timid with $5 to $10, you know, a day and they’re, you know, they’re low and then they don’t increase it because they’re not seeing the sales.

But then they’re not spending enough so they’re not getting traction and then they get frustrated and then they maybe turn their ads off. So the two things you can do here that are super important is have that testing budget in the beginning that you’re committing to and you’re okay if you don’t make it back right away. And then the other thing that’s so important is the numbers because you’ll never be in a situation where you’re like, I don’t know if my ads are working or not. If you’re tracking all of your numbers, you will know if your ads are working. If you’re tracking all your numbers and you’ll know exactly where the breakdown is, where it’s not working, if you’re tracking all your numbers, so as long as you do that, no matter if you’re the boat of increasing your testing budget or increasing your actual budget that’s profitable and you know you’re in a scaling phase, no matter which boat you’re in, as long as you know your numbers, you’re able to make very intentional decisions with your budget and feel confident about that.

I also see people who, they’ll come to us and there’ll be like, well, we’re spending, you know, maybe $3,000 a month with Facebook ads. We go through their numbers on our strategy audit that we ask people before they become a client and they tell us, you know this. And then we start asking them their numbers and they don’t really know the backend. They just know like, I’m spending $3,000 and I’m profitable. And then we always ask, well, why aren’t you spending more? And they’re like, well, I don’t know. You know, that’s just my budget. $3,000 and so I see people hesitant to scale, like, why not spend $5,000 if you’re profitable? Because then you’ll probably get even more out of your ad spend. But people are hesitant to scale when they don’t know their numbers. They’re like, well that’s just my budget, $3,000 it’s like, yeah, but if you increase your budget to $5,000 maybe you can make $15,000 instead of what you’re making or whatever it, you know, equals, and that’s where we’ve got, you know, our projection calculator that we look at with clients and everything comes down to that number and knowing those numbers.

And so that once you get to the place where it’s converting, you can also confidently make the decision to spend more money and kind of release that emotion to like, Oh $5,000 or whatever. It feels like a lot to you. For some people it’s $30,000 a month and some people it’s $5,000 like, when you haven’t spent that before on ads, it’s going to feel like a lot. So for some people, you know they have that feeling, but if you go back to the numbers that will calm you and that will make you feel like you really understand what you need to do to get it to the next level. And if you spend this much, you should make this much. And if you don’t, you’ll find the problems. So that is when you increase your ad spend. I loved the way this question was asked. So I wanted to share it with you all here because you might be in either of these boats and either one of these scenarios and not feeling confident about increasing your ad spend. So I want to give you that like the scenarios of when you should increase your ad spend.

If you want support with your marketing and you want to go through that free strategy audit that I was just mentioning where we do ask you your numbers and we do kind of go over your current strategy and what you’re seeing is your future strategy and kind of assess where you’re at today. You can go to helpmystrategy.com to see if you qualify for that free strategy audit and we’ll take you through just in the actual assessment that we take you through there to see if you qualify and tell you kind of the next steps for you. We’ve put a lot of time into the way those questions are set up. That really feels like a very personalized experience because that’s what I’m all about is making every piece of this very personalized to your business, your marketing, your goals. So helpmystrategy.com to see if you qualify and I will see you all on the next episode.