How Much Should You Spend on Advertising, and What Does an Online Customer Cost?
I often hear a question from clients - “You’ll make a website, set up advertising. How much money do I need to invest in the Internet to get clients?” Everyone wants to know how much money they need, and in this article I will share my opinion.
My name is Alexander, I am the head of the digital studio "Asgard Digital". Subscribe if you find this article helpful.
Now let's move on to the topic.
In Internet marketing there is such a thing as CPL - the cost of one lead (a client who left you a request on the site), and before determining the budget that needs to be planned for the month, and how much you need to invest in advertising, it is important to do some research.
You make a website, set up advertising and launch. Then we need to determine how much 1 Lead will cost, that is, how much one application from the Internet will cost. The cost of this application is influenced by many factors, that is, many variables.
**Firstly, this is the market: **Moscow, St. Petersburg, Tyumen, etc. That is, where there are more people, there is higher competition, where there is higher competition, there is a higher cost per click.
In Yandex, it is important to understand how the cost per click is formed. This cost is formed by the auction method. The more companies want to show up, the more they compete with each other. Whoever offers a higher bid will appear higher accordingly (will rise in the search). It is important to understand how much 1 click will cost, and this will be known immediately after the launch. Therefore, without launching, we will not understand the cost of a click. There may also be other variables: timing of shows or seasonality, but that's not all. After we understand the cost of a click (conditionally on search), it is important for us to understand the conversion of the site. After all, out of 100 clicks, a certain number of clients will go to the site and a certain number will leave a request. Let’s say if our conversion rate is 10%, then out of 100 people 10 people will leave a request. > For example, one click costs 100 rubles, respectively, 100 people are 10,000 rubles and out of 10,000 thousand we received 10 clients. Accordingly one client cost us 1000 rubles. Thus, CPL or the cost of one lead is 1000 rubles. If this cost suits you and you understand that the leads are targeted, then you can independently estimate how many of these same clients you need. **Let’s say you need **100 leads, that’s 100 applications you need per month, which means you need to invest approximately 100,000 rubles in advertising monthly. Do you need 200 applications? This means you need 200,000 rubles. 🔥 Important point. An application does not equal a sale. Out of 100 applications, 70 people can buy from you, or if you have complex services, only 10-15 people can buy from you. In applications there is such a concept as “sale conversion”, and here is also an important indicator and this indicator is called “Cost of One Client”, that is, not a potential lead, but the cost of the client who ordered from you. Then we understand what it costs, and how many of our applications become clients. Let’s imagine that, out of 10 people, 1 client orders from us, it turns out that we spent 10,000 rubles on 10 potential leads, and only one ordered. Result: 1 client cost 10,000 rubles. If this is normal for you, then you can already calculate the same math as how many clients you need per month. For example, you need a stable 10 clients per month, this is 100,000 rubles, and thus Yandex Direct will be like the “faucet method” (you need clients, put in 100 thousand rubles, unscrew the faucet, 10 clients fell to you. Close the faucet.) This is if we talk superficially about how and how much money should be spent on advertising. But there are also many different pitfalls.
It happens that today applications cost 1000 rubles, tomorrow they cost 1500 rubles, the day after tomorrow they cost 500 rubles. Here every day you need to keep your finger on the pulse in order to constantly tweak the metrics mix and analyze. For example, today 10 competitors came with advertising, accordingly the cost per click will increase, and tomorrow the same number will leave, thereby the cost per click will fall again. Answering the question of how much money should be spent on advertising, it is individual for each client. First, you need to determine the cost of the lead, determine the cost of the end client, and then look at the economic benefits. Since knowing the client’s cost, you can already regulate this budget yourself. 🔥 If this article was useful to you, like and subscribe so as not to miss new posts. I wish everyone high conversions and sales.