image post
author image
Editorialist

How to Create a Crypto Advertising Budget Like a Pro

Advertising
Last updated August 12, 2020

Some say that online advertising is expensive, others say it’s cheap. But no matter the size of the advertising budget, we can all agree that ads are an excellent way to bring a specific audience to your website. Especially if you just launched your project.

Sure, paid advertising is probably the fastest way to reach your audience, but conversions only come when ads are done right. 

Targeting and campaign tracking are of utmost importance, and sometimes you may want to hire a dedicated professional for that. But besides that, you also have to pay attention to your advertising budget.

While it may look like a mix of science and art, knowing how to set and spend your advertising budget can bring you closer to success, even in the crypto industry.

What is an advertising budget?

What is an advertising budget

First and foremost, money spent on advertising is an investment in building up a business. The advertising budget is a part of the overall marketing budget, and it represents the money you are willing to spend on paid ads that are supposed to reach your target audience.

Thankfully, we don’t have to figure out on our own how to approach creating a budget, because there are already many ways to do that. Here are the most popular methods:

  • Percentage of sales
  • Competitive parity
  • Objective and task
  • All available funds
  • Affordable

Percentage of sales

Allocating a percentage of each sale to your advertising budget is a popular approach. especially for small businesses. The percent comes either from past sales or future sales and grants a virtually infinite budget. 

The biggest weakness of this model is that it has a short-sighted approach. We do not live in an ideal world, so market fluctuations happen all the time.

A drop in sales (that comes from a major or minor reason) can bring the company using this approach into a ‘vicious circle’. Why? Because the moment your sales drop significantly, your budget will get proportionally tighter, further limiting your ability to sell.

Competitive parity

When entering into unknown territory, it’s wise to look at how the others are doing. Knowing how much your competitors spend on advertising can help you set an advertising budget that may bring similar results. 

The greatest benefit of this approach comes with the historical data it brings. Through competitive parity, you know how another company in the same industry acted to get the desired results. However, not all companies are the same

Although you can analyze their strategy, the goals may differ significantly, and so may the market condition. As we all know, the summer of 2020 is nowhere near the same as the summer of 2019.

Objective and task

At the end of the day we do advertising to reach a goal. Therefore, the objective and task budgeting method proposes an approach in which you first define the objectives you want to accomplish through advertising, then estimate the cost of your activities.

The major drawback of this method stands in complexity. You have to make a lot of estimations when calculating your budget. 

However, it comes with advantages over other budgeting approaches. The objective and task budgeting method provides you with a more specific, accurate strategy that you can use to guide your work throughout the budget period.

All Available Funds

If you like power plays, then you may like this method. The all available funds method is an approach in which you invest all available profits toward advertising. 

The strength of this approach is that you may leave a powerful impression on the market. 

However, such a strategy will require large amounts of money. And if a competitor can spend more than you do, then your campaign may not reach its purpose.

Affordable

In business, every dime counts. As the name suggests, the affordable method proposes you to set up a budget based only on how much you can afford to spend. Firms that adopt this method look at how much money they have available after deducting operational costs and considering other budgets. 

The affordable approach can be helpful for companies on a tight budget. However, the advertising budget is at the bottom. Ads won’t perform very well and that can limit growth in the long run.

Ad budgeting, step by step

Ad budgeting, step by step

Some of the budgeting methods presented above are more systematic and some are rather rough. 

We, at Coinzilla, believe that good planning brings better results. So, before going forward on deciding how you should spend your money on ads, we recommend you to take a look over these 5 steps to allocate your budget.

Set advertising goals based on your company’s objectives.

Come up with relevant SMART goals that you have planned for this ads campaign. This way you will have a clear idea of what you plan to achieve through advertising.

SIDENOTE. SMART is an acronym that guides the creation of better goals. It stands for Specific, Measurable, Achievable, Realistic, and Time-based.

Determine your most important activities.

When planning your budget, take into consideration that you may need designing and production, media planning, setting up, and maintenance. Additionally, you may have to create a landing page or make some modifications to your current website.

Prepare the components of the advertising budget.

Income – What money will you be granted for advertising?

Fixed expenses and flexible expenses – After you determine what activities you are to undertake, sort out what has a fixed price and what prices may vary. (e.g. The cost of designing a banner is fixed while customer acquisition cost may vary.)

Unplanned expensesNew regulations, policies, and sudden maintenance may require spending money to adapt to the new environment.  

Allocate funds for activities proposed under the advertisement plan.

Based on the customer persona and depending on your goals, a channel may be more effective than another. 

While covering every communication channel you ever heard of may sound like the perfect way to reach as many people as possible, you should consider that possible customer are reached better through specific channels.

Periodically monitor the expenses being incurred in the advertising process.

To some extent, it may overlap with campaign management. But when setting up the budget strategy, take into consideration that you should regularly look into the evolution of your advertising spendings and be ready to adapt.

Budgeting with Coinzilla – Ad impressions, clicks, and conversions

Budgeting with Coinzilla - Ad impressions, clicks, and conversions

Now that we’ve gone through the basics of advertising budgets, let’s take a look at how all this information applies to Coinzilla.

As an ad network dedicated to cryptocurrency, Coinzilla provides you with a platform where you set up a display advertising campaign and deliver your banners across numerous cryptocurrency-related websites with minimum effort.

What to take into consideration

If you need customers for your crypto-related project, display ads and native ads are the way to go.

While planning your budget you should take into consideration ad impressions, clicks, and conversions.

Impressions

In our platform, the display and native ads price for one thousand impressions (CPM) is calculated automatically through our bidding system.

Clicks

You can easily start calculating your budget by considering the general average CTR for this type of ads:

  • 0.05% for display ads;
  • 0.27% for native ads.

In our experience, a well-optimized display ad with a good banner can get an average CTR of 0.15%, while on native ads it can vary between 0.15% and 0.3%.

Conversions

The conversion rate (CR) is a pretty sensitive topic in every industry, not only in the crypto space. But because there is no known average for crypto, we will look into the most similar industry.

The financial industry’s average conversion rate for display ads is 1.19%.

Your conversion rate will vary depending on the type of project you have, your offering, and how well optimized your landing page is.

Now that you know these percentages, you need to establish how many leads should you statistically expect in your budget by solving this equation:

{[(Budget / CPM) * 1000] * CTR} * CR = Conversions

For example, if you have an advertising budget of $5,000, a CPM of $3, a CTR of 0.3%, and a CR of 3%, you should expect 150 conversions.

{[(5,000 / 3) * 1000] * 0.3%} * 3% = 150 Conversions

Many impressions, little conversions?

Many impressions, little conversions

You may find yourself in the situation where you spend your advertising budget but you get little to no conversion. In that case, you should take the following actions:

  1. Timing your ads for efficient budgeting

Make sure your ads are being shown at the same time your target audience is most likely to be active. Maybe your audience is more receptive at night, and you’re spending your budget throughout the day.

  1. Check your targeting

Although you may be looking for clients from Asia, you may find that the USA audience is more receptive to your English website.

  1. Ad design, message, and user intention

As mentioned above, your ad design can improve your CTR as well as your brand image. However, take into consideration the user’s intention. If a user clicks through your ad with the intention of getting something for free, he is less likely to spend money on your website.

  1. Reevaluate your landing page and offers.

Poor landing page experience is the #1 enemy of conversion. So make sure yours is neat. But if your landing page is at its best, maybe you can come up with a better offering or a promotion.

Key takeaways

  • The advertising budget is a part of the overall marketing budget, and it represents the money you are willing to spend on paid ads that are supposed to reach your target audience.
  • There are several budgeting methods and some of the most popular are ‘percentage of sales’, ‘competitive parity’, ‘objective and task’, ‘all available funds’, ‘affordable.’
  • Whether you want to take a more or less systematic approach in planning your advertising budget, you should set advertising goals, determine the activities, prepare the components of the advertising budget, allocate funds, and periodically monitor the expenses.
  • When establishing your advertising budget for Coinzilla, this equation can help you greatly: {[(Budget / CPM) * 1000] * CTR} * CR = Conversions
  • If your campaigns are not producing enough results, check the timing of your ads, the targeting, ad design, message, user intention, and reevaluate your landing page and offers.
2
Copy link
Powered by Social Snap