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How Does Budget Impact Social Advertising Strategy?

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It’s (not that) complicated.

I recently received a great question from a new client: what impact does budget have on social advertising campaign strategy?

The simple answer: you can do more with a bigger budget.

You also have to do more with a big budget, in order to scale results.

I know. This is a little confusing, so let’s look at an example of how it works.

First, we’ll start with a small budget. 

Imagine you have an online business, selling t-shirts. You have $100 set aside for a test budget and you want to see if social advertising can help you increase sales.

Because your budget is limited, I recommend you focus exclusively on driving sales and that you target only consumers who have already expressed interest in your t-shirts, but haven’t purchased.

Who are these consumers? They’re people you already know. Your email subscribers, your site visitors and social followers who have recently engaged with your content.

We’ll set up a simple campaign retargeting these groups of qualified potential customers, people who have raised their hands digitally as being interested in buying your product. Our messaging will be straight forward. Here’s an offer for an exclusive discount on that t-shirt you’ve been thinking about buying.

To make our transition to the larger budget example easy, let’s say your $100 spend resulted in a bunch of sales. You drove $300 in revenue with your $100 budget. That’s a 3x return on your ad spend and it’s really great for your first campaign.

Your first response will likely be: I want to spend more!

But, how much more can you spend exclusively on a purchase goal? Well, this depends how many of those qualified potential consumers you have, but it’s likely that you don’t have a large enough pool of them to immediately ramp up your spend by 10 to 20x.

So, what changes do you have to make to your strategy when your budget increases?

Your strategy has to evolve to scale your results.

In order to get more people in that pool of qualified potential buyers, you have to layer on mid-to-upper funnel campaign activity.

This will require you to build new audiences, likely including a mix of people who look like your most qualified audiences (lookalikes) as well as interest-based audiences. New audiences mean you’ll also have to re-think your creative. You’ll have to test new messages to see what copy and creative resonates with people who are scrolling past your brand or product messaging for the first time.

And as you begin to test and learn with mid-to-upper funnel campaigns, you’ll also have to keep an eye on your purchase results. Are the new people in the pool as good as the ones you already had? If not, how can you find better people who more closely resemble the ones who inspired you to increase your campaign budget?

These are all new questions and challenges that present themselves as you begin to scale your campaign spend with a larger budget. It does make your strategy a bit more complicated, but it’s a fun challenge and you'll learn a ton about your customers in the process.

Want to learn more about paid social strategy? Sign up for our course, Social Ad Strategy Masterclass.