How do you determine how much ad spend to put into Google vs. Facebook?

In order to scale, it is a must for e-commerce businesses to advertise on both Google ads (Search, Display, Shopping, Youtube) and Facebook ads (Facebook & Instagram). But…how do you know how to allocate your ad spend?

To make decisions like this, we rely on the data. If you’re already currently running ads on both platforms, this means evaluating the performance of both. Lets look at 5 potential scenarios:

1. If one platform is performing well and is profitable, for the sake of scaling it is a smart decision to allocate more budget to the higher performing platform.

2. If the lower performing platform is still profitable, it may also still be scaleable and you should consider increasing ad spend as long as profits are maintained.

3. If the lower performing platform is NOT profitable, your plan of attack should be to eliminate all wasted spend (and re-allocate it to the other platform) and optimize the few areas that are still performing well. If there are no areas performing well, the smart choice is to allocate the majority of this platform’s budget to the higher performing platform, and begin digging into the core issues that are causing the worse platform to perform poorly. In some cases, a complete account overhaul and rebuild is necessary.

4. If both platforms are performing equally well…scale them both! If one platform is better aligned with your goals and target demographic, allocate more to that platform. If not…scale them both equally.

5. If neither platform is performing well…there is a deeper issue and developing a detailed marketing strategy is highly recommended before putting more money into ad spend.

How should seasonal businesses manage their ad spend?

Some products have a seasonal appeal, and will sell much more during certain months than others. For example - a business that exclusively sells winter jackets is going to have decreased demand during the warmer spring & summer months, and increased demand during fall & winter.

We’re big proponents of scaling ad spend as much as possible, however the seasonal aspect has to be taken into consideration. There is simply no point in spending the same amount of ad-spend in slower months unless there is a unique strategy in place for how that ad-spend will be utilized.

So…what should a seasonal business do?

A seasonal business with an aggressive marketing plan may choose to keep spending consistently throughout the year, however if thats not the case:

• Strategize by identifying its slowest 6 months, and its busiest 6 months

• Create a plan for scaling ad spend up during busy months

• Create a plan for:
  a) scaling ad spend back for slow months (and never stop retargeting!)
  b) re-allocating ad spend to other platforms that maintain better performance
  c) adding new products that can be sold during the slow season

• Identify how much you are willing to spend to acquire a sale during the slow season

Seasonal businesses should almost always set aside a portion of marketing budget for the slow season. What this looks like will vary - the key is having a plan ahead of time.