How to plan a budget for online campaigns?
There are several key elements that let you estimate an effective budget for an online store: among them are CPC rates (cost per click) — that is, how much we pay for a click on our ad — which is the most commonly used billing model for online campaigns. We can check average rates for our industry in the Google Ads keyword planner, among other places.
The next factor is the conversion rate: according to many industry reports, the average conversion rate in e-commerce is 2%. Knowing how much we pay on average per click (acquiring a user), the average order value, and how many customers we need to reach a satisfactory revenue level, we can estimate the amount needed for paid advertising.
In addition to such simple calculations, it's worth remembering that e-commerce online campaigns are not only the ones aimed at conversions (purchase). You also need room for top-of-funnel activities aimed at building brand awareness and customer recognition. Part of the budget should also be reserved for tests (new ad creatives or target groups).
The next factor is the conversion rate: according to many industry reports, the average conversion rate in e-commerce is 2%. Knowing how much we pay on average per click (acquiring a user), the average order value, and how many customers we need to reach a satisfactory revenue level, we can estimate the amount needed for paid advertising.
In addition to such simple calculations, it's worth remembering that e-commerce online campaigns are not only the ones aimed at conversions (purchase). You also need room for top-of-funnel activities aimed at building brand awareness and customer recognition. Part of the budget should also be reserved for tests (new ad creatives or target groups).