You will be able to write a budget plan you can justify to a boss, a client or yourself.
Before you spend money on a first ad campaign, write one page that says what the money is for, what it has to prove, when you will check the results and when you will stop. The page brings lessons 8.1 to 8.3 together, and you should allow about twenty-five minutes to write it.
Someone will eventually ask why you are spending this much on ads. It might be a boss, a client or a business partner. It might also be you at 11pm, looking at your bank balance. Without a plan, the honest answer is only that the amount seemed about right. With the page in front of you, you can say what the money is for, what it has to prove, when you will check and when you will stop, and you can point to the figures behind each answer.
The page has four parts. Each part below comes with the matching section from the plan of Priya (an invented example, with example figures throughout). She runs a business that takes trial bookings from prospective students, and she is planning a Google Search test.
Start with the spend and the number of days. Size the budget from two directions. The first is the business side, which you worked on in lesson 6.5, Build your first social campaign: how much can the business spend on learning without strain? The second is the campaign side: how many results does the campaign need before you can judge it? There is no standard number for this, so be wary of anyone who gives you one without knowing your business. Read the learning phase guidance for the platform you are using, as covered in lesson 8.3, The learning phase: why results wobble at first. Aim for a budget that can produce a reasonable number of conversions at your target cost over the test period.
If the budget you need is far beyond what you can afford, you are better off knowing that before you start. You have two options. You can optimise for an event that happens more often, or you can run the test for longer at a lower daily spend.
Then write one sentence saying what the test must prove. "Ads work" is too vague to answer, so it is not an acceptable goal. A usable test goal names the channel, the result and the cost ceiling. For example, the test might need to show whether Google Search can bring trial bookings at or below S$100 each.
Priya sets S$20 a day for 28 days, which is S$560 in total. That is an amount she can afford to spend on learning this month. Her test must prove whether Google Search can bring trial bookings at or below S$100 each.
Take your break-even numbers from lesson 8.1, Start from what a customer is worth, and write down the maximum you can pay for a customer. If you sell in two steps, getting a lead first and then closing the sale, also write the maximum cost per lead and the close rate you used to work it out. Your campaign target can sit a little below the maximum. The gap between the two is your margin of safety.
Some campaigns are measured by return on ad spend rather than cost per result. If yours is one of them, write the break-even return and the target return instead, as Farah did in lesson 8.2, Bid strategies: manual, automated and targets.
Priya's maximum cost per student is S$300. About one in three of her trial bookings enrol, so her maximum cost per booking is S$300 x one in three, which is S$100. She aims for S$80 per booking. Over her S$560 test, that works out to about seven bookings.
Use lesson 8.2 to name the bid strategy for each campaign in the test, along with the conversion data it depends on. If the strategy needs reliable conversions, name the conversion event and the date you tested it. If you are using a cap or a target, write down the figure and where it came from. If your conversion data is thin, say so on the page and choose a bid strategy that can work with it.
Priya uses maximise conversions on her tested Lead event from the booking form. She sets no target at first, by choice. Google Ads does offer a target cost per action (Target CPA) bid strategy, and Google says it can be used with no conversion history, so having no booking history on Google yet would not rule it out. She may add a target cost per action of S$100 later. Check Google's own Target CPA help page for how it currently works.
Set your first review date late enough that the learning period has had a fair chance. Day two is too early. Until that date, commit to making no big edits unless something is broken, such as a wrong link, a disapproved ad, broken tracking or spend going to the wrong place.
Decide your stop rule now, while you are calm. A stop rule says what result will make you pause the campaign. A common form is a spend threshold: if the campaign has spent some multiple of your target cost per result with no results at all, you stop. Write your own stop rule with real figures. When it triggers, check the tracking, the offer and the page before you spend any more.
Priya's first review is on day 14, and she will make no big edits before then unless something breaks. Her stop rule is S$300 spent with no bookings at all, which is three times her S$100 maximum. If that happens, she pauses the campaign and checks the tracking, the page and the search terms report before spending more. At the end of 28 days, she keeps the campaign if bookings averaged S$100 or less, and if they didn't, she rethinks the offer or the keywords.
When your page is finished, anyone who reads it should be able to tell what you are spending, why, and what would make you stop. The activity below asks you to write that page for your own first campaign.
Write a one-page budget and bidding plan covering test budget, duration, targets, bid strategy, review date and stop rule.
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