The Expenditures in Advertising

One of the most common questions that advertising agencies encounter is the overall cost of advertising. The primary reason for this is to primarily know the budgetary allotment for the advertising campaign.

ad expenses summary

It is also a great way to project the strategies that you will need to make the campaign successful. Having said so, knowing the advertising costs is an integral process of business planning.

Budgeting Phase

When it comes to advertising expenditures, starting on small advertising efforts could do extraordinary things for the business. Although a 100 CAD ads spending will not be as efficient as a 1000 CAD ads spending, but the point is starting small could really make a difference.

You can gradually increase your ad spending as time goes by. There are lots of instances wherein really limited ad spending grew significantly along with the sales.

It is regardless of how much money does your business make. The best thing that you can do is to limit your budget on ads and just increase afterward as the business revenue also increases.

The extraordinary thing about digital marketing is that you can scale up or down easily. You can even spend more or less 10 CAD a day to get started. Just be consistent on your marketing campaign and in time you’ll definitely see progress.

The 5% Revenue Rule

When it comes to revenue, your goal is only to use 2 to 5 percent for your advertising efforts. It is always better to reinvest most of the revenue in the core of the business itself for more growth.

You can opt to diversify your business for more profits from various streams. This is totally advisable because having more clients will surely secure your business in the long run.

Having said so, it does not mean that a business will earn immediately after deploying ad campaigns. Instead, it will still take some time before the business will reap its benefits.

Moreover, planning is an integral part in coming up how much budget allotment required for a successful ad marketing campaign.

All About Distribution and Creation Costs

There is no doubt that advertising and marketing can be considered as basic costs. To ensure that you will get the right budget projection, you need to identify the distinctiveness of each element.

The goal is to secure a budget for both. In order to do that you need to have the fundamentals of both:


We can define this as the resources allotted on a particular channel to get new customers. It is where a marketing material is being laid out to its target audience.

A concrete example is the ad expenses allotted to social media sites. Users of those sites will be able to view the ads. The frequency of the ads to be shown on those sites will depend on how much did you spend on ads.


Forming marketing materials require some funds in order to become possible. However, you do not want to drain all your resources on the creation phase alone.

For an instance, you have a budget allotment of 10,000 CAD both for advertising and marketing, avoiding putting it all on a single component.

There must still funds for other components of the business. You’ll surely need it in case there are emergency situations that requires funding.

What to know?

When it comes to determining how much money you should allot on advertising and marketing, doing some analysis beforehand is definitely a must. It is a critical aspect if you want your business to be a huge success.

To give you an idea of those components, let us have a quick rundown of them below:

Infancy Stage

This is the phase wherein a business does not have any customers yet.

Youth Stage

There are very few customers at your disposal giving you a small profit.


The customer base is already growing in numbers. Also, the business has been running for more than a year already.


The customer base is already at its peak and the business has gained the trust of its customers.


Is there an ongoing revenue model for your business?

If an ongoing business model is present, expenditures will be significantly higher. This is because of the repeat purchase that will be made soon.

How much will be the profit margin for your product or service?

There is a huge difference when you are having a 20% margin against a 50% margin. You shall take note of this when it comes to deciding things particularly with the budget.

How important is competitiveness on ads?

Ranking excellently on various search engines such as Google requires a bit of work. So spending some money on ads will definitely keep you on track and be fast moving.

Can a 1000 CAD budget be enough to get customers?

Absolutely yes, even a 300 to 500 CAD budget can get customers. However, the results will be reliant depending on how much budget you have invested on an ad campaign.

For starters, you would need to allot lesser budget on ads just to test things out first. It is recommended to spend at least 300 to 500 CAD at maximum for first-timers. As a result, you will tend to get some clicks for your business pages/sites to keep your operations going.

In time, you can increase the budget for your ads as you gain more sales on your business. You can actually check if your ads are doing well or not through the analysis tools available at your disposal.

The usual pricing for popular social media sites such as Facebook is approximately 1 CAD per click. While Google has an average of 3 CAD per click that is why being on the safe side of at least 300 CAD is recommended.

The most ideal situation for an ad campaign is to get 2 to 3 leads for every 100 visitors. If that is the case, then your marketing efforts are going on the right track.


There might be a lot of complexities when it comes to ad marketing. However, doing it one step at a time and at a steady pace could make a difference. Just keep in mind that you will not get any results over night but you should keep going. By using the analytic tools that are available, you’ll definitely get the most out of your campaigns.

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