When preparing to start a business, what is the first thing that comes to mind? What will the name be, where it will be located, or maybe it is what the budget for your business is? These are all things to think about, but have you ever budgeted for ad spend? 



Budgeting for ad spend is crucial for modern businesses because your business cannot reach your target audience just through word-of mouth reputation or even traditional ads. As a business owner, you need to broaden your horizon to thrive. A social media budget allows you to create a plan that outlines ad spend over the course of a month, quarter, or year. 

Traditional advertising would seem like the simpler choice of the two, but you would actually be wrong about that. Platforms like Facebook, Google, and Yelp have their own ad creation process in which they walk you through how to create the ad, use relevant keywords, and target your desired audience. 

Gone are the days where people need to pick up a paper or watch television to see ads. Companies as well as content creators, are finding ways to include ads in every facet of our lives, because the more we see a specific product or service, the more likely we are to remember and recognize that product or service. 

According to Statista, the growth in ad spend in 2022 has increased by 23% percent over last year. What is more is that, as of September of 2017, ads on social media are the most perceived form of ads. 

2021 saw a 17.7% increase in contribution to the performance of companies over 2020, which means that they are more likely to switch their ad budget to reflect more spending on digital marketing, social media ad spend, and mobile marketing. 

Ad spending on social media is predicted to reach around $177 billion, which is more than ad spending on television, according to Charli Day of Agora Pulse. Experts are also predicting that, by 2024, marketing on social media will make up about 26.5% of all advertising. 

One thing that sets social media ads apart from traditional ads is that your ads can target specific groups of people with a clear message or call to action for your audience to follow. Also, most people do not really know that they are being targeted by your ads, which can make them more receptive to them, so they may subconsciously remember the ad after viewing it. It just goes to show that ads CAN be effective, and they CAN save you from opening your wallet, unless you choose to add more funds to your budget. 

Now that importance has been illustrated, let us dig into how you can maximize your ad budget on social media. 

Creating an ad budget involves the following aspects: 

1. Creating and understanding your goals – by doing so, you will have a clear grasp of what the purpose of the ad is and its goal. 
2. Analyzing performance of ad campaigns – Looking back at the effectiveness of your ads is an effective way of figuring out what works and what does. Trends change all the time, so it is important to figure out what works for your ads. 
3. Creating the ad plan – The first two steps are necessary to start the planning of the ad/ad campaign. 
4. Budgeting – Now that the plan is in place, it is time to decide what the budget will be. Your budget will reflect what type of ad, what platform it is on, how many people you want to see the ad, and how long you will be running said ad for. 

Think of this list as you would a check list. Like any checklist, you should follow each step and move on to the next once you feel that the step is fulfilled. Each step must be well thought out for your ads to be as effective as you want them to be. In the interest of your business, it is important to make your dollar stretch as far as possible, and Optimize can construct your ad, choosing the location and demographic, choose the right keywords, and report on the performance of your ad.