Why budgeting matters
Budget is a strategy, not a spreadsheet. The right envelope accelerates learnings, reduces CAC over time, and keeps your team focused on outcomes—not vanity metrics.
1) Choose a budgeting model
A. Top‑down (% of revenue)
- New brands: 8–12% of projected revenue.
- Growing brands: 5–8% to sustain momentum.
- Mature/efficient: 3–5% with strong brand equity.
Simple and fast. Revisit quarterly as revenue and payback evolve.
B. Bottom‑up (CAC & payback)
- Target CAC ≤ Gross margin × LTV/Payback
- Define acceptable payback window (e.g., ≤ 3–6 months).
- Back into monthly budget from target volume × CAC.
More precise. Needs reliable tracking and margin clarity.
C. Funnel allocation (rule of thumb)
- Prospecting: 60–70% (new reach & testing)
- Retargeting: 20–30% (site & video engagers)
- Brand/Defensive: 5–10% (search brand, competitors)
Shift weight as creative efficiency and demand evolve.
2) Set guardrails
- Daily cap: avoid burning learnings in a single day.
- Max CAC & min ROAS: define stop‑loss rules per campaign.
- Frequency caps: limit fatigue on retargeting pools.
3) Inputs & assumptions
- Baseline metrics: CPM, CPC, CTR, CVR, AOV/ARPU, margin.
- Attribution: use server‑side events/Conversions API; keep UTMs and naming consistent.
- Landing readiness: speed, clarity, and message match with ads.
4) Build your month‑1 plan
- Start with 3–5 creative angles; 2–3 variants each.
- Structure: Prospecting (broad/interest) · Retargeting (site/video) · Brand/Promo.
- Name & tag everything; set learning budgets you can keep for 7–14 days.
5) Launch checklist
- Pixel/CAPI verified · events mapped (view, add, lead, purchase).
- Tracking sanity test with a small spend before full rollout.
- Landing pages pass speed and clarity checks.
6) Optimization cadence
- Daily: outliers only (budget leaks, broken tracking).
- Twice weekly: creative pruning, angle/offer tests.
- Weekly: re‑allocate budget by CAC/ROAS and watch‑time/hold metrics.
- Monthly: revisit the model, scaling winners 10–20% at a time.
7) 30/60/90 scaling plan
- Days 0–30: prove the angle → offer → page chain; reach first stable CAC.
- Days 31–60: scale winners, launch net‑new angles, add mid‑funnel content.
- Days 61–90: expand geos/placements; refresh top creatives; tighten retargeting frequency.
Troubleshooting
- High spend, few conversions: mis‑match between ad promise and landing; fix first fold and offer clarity.
- Good CTR, poor CVR: test pricing/bonus, reduce form friction, improve social proof.
- Fatigue & rising CPM: rotate hooks, refresh first 3 seconds, widen audiences slightly.
Want a data‑driven budget & action plan?
We audit structure and signals, estimate CAC/payback, and deliver a 90‑day roadmap tailored to your goals.