SHOW NOTES

 

“When is it time to increase my ad spend budget?”

That, my friend, is one of the most common questions I get whenever I do trainings.

The truth is, the answer is not as complicated as you might think. There are two main reasons you’d want to increase your ad spend.

  • Your ads are converting and profitable, and it’s time to scale!
  • Your budget is so low that you’re not getting any traction with your ads.

The hangup that most people experience is that they don’t give themselves permission to increase that budget out of fear or uncertainty.

If you’ve been waiting for your greenlight, this episode is it!

Tune in to figure to learn if now is the right time for YOU to increase your ad spend budget. If it is, this is me giving you permission to DO IT! 

If today’s episode brought you more clarity on increasing your ad spend budget, shoot me a DM over on the ‘gram (@emilyhirsh) and tell me all about it!

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Emily Hirsh:

Hello everyone. Welcome back to the podcast. I hope you are all having a fabulous week. I am feeling good. I wanted to shout out for somebody who needs to hear this because I had like, the first half of this week was crap. I just had one of those weeks as the CEO where it’s like, everything was going wrong. I was a total bottleneck in like five different areas. It was like, I couldn’t easily delegate something because I had to go in and look at it, or do something, which is rare, but sometimes when we do bigger projects, or we grow a lot and we’re trying to build a new process, or build something new out, or launch something new, that’s just kind of what happens. And this week just felt like I was walking through mud, but by the end of the week, I’m feeling way better.

So it was one of those weeks where like for three days, I’m like, I am quitting. Screw this. Why do I even do this? And I got over it, but I was thinking about as I was going through it, I’ve done that so many times, had so many weeks like that in the five years I’ve had my business where you just know every time that’s happening, something good is on the other end and that you sticking it out on those days is what makes you different than 98% of people in the world. And you showing up as a CEO, that is what creates the success at the end of the day, because most people would quit when faced with challenges, or things that feel hard, or you’re putting in late night work.

And even at my level, I still have days like that guys. So I want to just say that because I know there’s a lot of people out there who can relate. I also know when things are really, really good and we’re in total momentum, and everything’s flowing, and I feel like I have so much free time, and white space, and I don’t even know what to do. I know that that’s not forever. There will be a harder time, and then there will be an easier time, and we ebb and flow between that as we grow. That’s just kind of part of having a business. So I had one of those weeks, but today I finally feel like I can breathe. So I’m feeling grateful for that, and also so grateful for my team because they always get me through it.

So today’s episode I am answering, “when is it time to increase my budget?” And that question, because I love this question, I get this question a lot when I do webinars or workshops that’s actually not necessarily directly related to scaling your budget based on ads that are performing. And so there’s two reasons why you would increase your budget. The first one is kind of the more obvious one. If your ads are profitable, you would increase your budget and you would want to kind of increase by about maybe 10 to 20% each week, depending on how it converts, how much you’re spending. We have clients who it’s like, it’s an unlimited budget, just keep increasing it as long as our return on ad spend stays the same. And we also have clients who we increase the budget, or we recommend increasing the budget based on the second piece I’m going to talk about, which is volume.

So the first reason you’d increase your budget is like the obvious one, your ads are profitable. Your ads are converting. You’re getting leads in there. You’re getting sales. When you track your total results, your return on ad spend is above two times, ideally two times return on that ad spend increase that budget. Hopefully you’ll then make more money. Seems easy. Sounds easier than it is usually, but that’s a time that you would increase your budget. 

Now a second time when you would increase your budget is if you are spending too little to see traction. And I see this happen a lot with people where they will say, “I’m going to spend $500, $1,000, even $2,000,” which is great if that’s all you have to spend, at least you’re spending something and hopefully getting leads, and traction, and people paying attention to what you’re putting out there, and you’re making progress. Totally fine. But I just had this conversation with someone on the Not For Lazy Marketers Club workshop, where she did a monthly sale every month, and she was like, “can I increase my budget more than 10 to 20%, because my sale is doing so well every month?” So I had her come on live and I asked her, “how much are you spending?” And she said, “I was spending $2,000.” And I said, “you could easily double your budget because $2,000 is so low.” And she also told me that cold traffic is converting to this. It’s basically a self-liquidating offer funnel that she has, cold traffic was converting to it. 

So in that case, you could easily double your budget and probably still get good results because you are spending so little. And $2,000 in the big scheme of things is not a lot for a promotion. It might be all you have right now. And again, that is okay, but there’s a lot of room to increase that. So you don’t have to follow that, like only scale by 10%, 15%, 20%, because it would be really slow, especially for a promotion that’s every single month. 

So that got me thinking after the workshop, just about how, when you go to look at a budget, make sure you’re taking into consideration, “if I spend that budget, what’s the output of that budget?” Because if you’re going to go do a live webinar and you’re going to put in the work of creating the live webinar, the slides, the sales funnel, the registration page, that emails, all the components that go into a live webinar, and you’re going to go create that live webinar. And then you only spend $500 and you have a limited warm audience to work with, let’s say you pay a good cost per lead at $5. You’re going to get 50 people signed up for that webinar, which again, if that’s all the budget you have, at least it’s something, at least it’s some traction. 

But think about all that work that goes into creating a webinar presentation, well, creating the funnel, the emails, the ads, all the components, that’s hours and hours of work to only have 50 people signed up. And then let’s say 20% show up. I mean, you’re talking about less than 10 people are going to be on that webinar live. So what you need to think about is, “if I’m going to spend this budget, what’s the output I’m expecting from that budget, and is that worth my time and energy and effort?” When my team does a launch, when we do a live webinar, or we do a podcast secret series, or we do anything, that’s a new funnel, I don’t spend less than $10,000 on promoting that because to me, the amount of effort and energy that goes into promoting or putting that on, putting that event on isn’t worth it, unless I get at least 1,000 to 1,500 registrants. 

So to me, it’s not worth it. I don’t want to do a webinar unless I have a minimum of a thousand people signed up because of the work that I put into it, and I want the output to equal that work. And so your budget can really hinder you if you spend a very low budget, because you put all this work and you spend a low budget and you only get a very small handful of people. I mean, if you only get 50 people signed up for a webinar, you might not even get a sale and it might not be because your webinar wasn’t bad, it was just because the volume was so low. 

So I think that you should absolutely choose budgets that you are able to spend in your business and that you’re able to see as an investment in your business and not make back right away. And if that’s $500, again, that’s $500. Just be strategic with where that’s going and don’t spend a lot of energy and effort on a live webinar that you’re going to get 50 people signed up for. Save that budget, do something strategic with it, and then save it up so you have a $1,000, or $2000, $3,000 to spend at least on that webinar. But also, looking at your numbers and knowing, okay, if you choose that budget and then you look at, with that budget, I should get this many leads and potentially this many sales, and you go through that process and you realize if I get that many leads in that many sales, it’s not worth it to me to ultimately spend that money and put that work in. Then if you increase your budget by, let’s say a thousand dollars, would it then be worth it for you? 

And so, a lot of times, I mean, I choose ad spend budgets obviously based on numbers of sales goals, and for us, application goals, and we have a lot of historical data that we’re working with, but I also choose it based on the minimum number of people I want to sell and have signed up for my webinar to make it worth my effort. So there’s a huge opportunity to give yourself and your business the green light to increase your ad spend budget if you are spending a really low amount and too low to see a lot of traction. Because what will happen for the person spending $500 a month is it’s going to take you three to six months to really get enough traffic into your funnel to know if it’s converting or not, and that’s slow, that feels really slow. If you’re at that level where you have to spend that small amount of a budget, I would recommend making sure you’re pairing a lot of relationship building organic efforts into your paid ads so that you can hopefully make some money through those efforts and increase that amount of investment you’re able to put in your business. 

But the component that I want you to get out of this is the obvious reason to increase your budget is if your ads are converting, and that’s what a lot of people wait for on that green light. But you also might have a lot of opportunity to increase your budget if you see it as a reason to increase it as to get more traction faster, then you can double your budget if you’re spending a low amount, and oftentimes people do that. I see so many people, whether it’s my students, or people in my workshops, or webinars, who are like, “I’ve spent $25 and here’s my clicks and my conversions, and it’s not working, what should I do?” That’s not enough money. You can’t spend $25 and then make all these huge decisions and changes in your ads and your funnels. It’s not enough. You need to spend and get a hundred people minimum in your funnel, ideally more like a thousand, to really have some data to go off of, which is going to require a couple thousand in ad spend. 

And so spending a small amount and then freezing and being like, “I don’t know, I can’t increase my budget because my ads aren’t converting because they’re not getting these good numbers, I’m not getting sales.” You have not spent enough money to get sales yet. So don’t let that hold you back and make you frozen in your actions. Give yourself permission to increase that budget. Obviously, if you have it, if you have the investment, if you can do that, give yourself permission to do that, but make sure you do it also intentionally. So you choose to increase that budget, let’s say you decided to triple that budget and you are able to say, “I see this as an investment. I’m going to go into this and I’m going to learn what is working, what is not working, get some leads on my list, get some visibility to my brand, and also have an expectation of how many leads and sales should I get from that budget, and is that enough for the amount of effort and maybe resources I have to put into putting this promotion on?” And if it’s not, increase the budget so that you get enough out of that.

I’ve had clients who are launching something new and it’s not worth it to them to launch that and not spend a certain amount because of the resource and time and energy they put into it, and so that’s also how they’re determining their budget. So if you’re one of those people who you feel like, “if I add $1,000, or if I add $2,000 to my ad budget, I will be able to get more leads faster, more sales faster,” give yourself permission to increase that because you don’t have to increase slowly when you’re at that level. The 10% to 15%, or 10% to 20% increase is really for people who are like spending at least $3,000 a month, their funnels converting, they’re getting leads, and you can increase that much every week. That’s more like an automated funnel rule, and the only reason it’s capped at that is as you increase, obviously the cost could go up. So you’re watching that to make sure you can balance scaling while staying optimized and keeping positive return on investment. 

But if you’re spending that low amount, the more you spend… you know, paid ads is just an exchange for your time. So you can either grow your business through time of hustling, of getting leads, of getting people to pay attention to your brand, of networking, of getting yourself out there. You can spend a ton of time, and in the beginning of your business, that might be 100% how you get your sales. Paid ads speed things up. It says, I’m gonna spend this money because I’m paying to get eyes on my brand. I’m paying to get these email leads in my email list, and it’s just a lot faster. So you can also make that decision to increase your ad spend, to increase the speed at which your business grows. Obviously, if you have the investment or not, you have to still see it as an investment. See your ad spend as an investment. It’s something to think about if you are at that level. Thanks so much for listening today guys, I’ll see you next week.