Published · By Ailumic

How much should a small business spend on ads to start?

Start with an amount you can afford to spend on learning rather than on results: enough to run for a full week, so weekdays and weekends both show up in the report, and small enough that a run which teaches you something and sells nothing is still fine. With Ailumic there is no minimum, you pay only for ads that are shown, and whatever you do not spend stays on your account.

The first run is a lesson, not a launch

A first run tells you four things you cannot know beforehand: which placement people respond to, which hours and days, which area, and whether the ad itself earns clicks. Those four answers are worth more than the handful of sales a first budget could buy, because every later run is built on them. So size the budget by what you can afford to spend on finding out — and write that down before you start, so a run that teaches you something and sells nothing still counts as the success it is.

Three ways to size it

  • What one customer is worth. Think about what a new customer brings you over the months you expect to keep them, then about how many of those you would be glad to win. A first budget that is a fraction of that is easy to justify; one that is several times it is not, until you know the ad works.
  • What you spend on other ways of being seen. A stack of flyers, a market stall, a listing, a sign: you already have a sense of what being seen is worth to you. Start in that range, and compare the report with what those bring.
  • What you can lose without wincing. An amount that, if the first run taught you only what not to do, would change nothing else in the business. Whichever of the three is smallest is a fine place to start.

Enough for a full week, spread evenly

Whatever the amount, let it cover a full week: a Tuesday afternoon and a Saturday morning are different markets, and a report that saw only one of them cannot tell you which to buy more of. Ailumic is built to spread the budget evenly across the days you chose, so it lasts the run rather than the first morning. If the amount feels thin across a week, narrow the area or the placements rather than the days.

Where the money goes

Your budget buys viewings, one at a time, in the same auctions the biggest advertisers buy in; our guide to the price per thousand explains how a budget turns into a number of viewings. With Ailumic the terms are these five sentences. Start with what you have — there is no minimum. You pay only for ads that are actually shown. The price is in front of you before you confirm, and nothing runs until you do. No long-term commitment: pause, change the budget or stop whenever you like. What you have not spent stays on your account.

The rules of thumb you will read elsewhere

You will find rules that tie an advertising budget to a share of revenue, or a platform’s suggested daily amount. They were written for businesses with revenue and a history of what advertising did for them. A first run has neither, which is why this guide sizes it by what you can afford to learn from instead. Once you have a few runs behind you and a report for each, a share of what those runs brought in becomes a budget you can defend.

The second run

Read the report, change one thing — the placement, the area, the days, the ad — and run again with the same budget, so the two runs can be compared. When a run clearly works, add budget to it rather than starting over; the next run begins from what the last one learned. Our guide on reading an ad report says what to look at first.

Guides

  • How do real-time ad auctions work?

    Every ad slot is sold in an auction that lasts a fraction of a second. Who bids, what decides the winner, who pays, and what it means for a small budget.

  • What is a CPM in advertising?

    CPM is the price of showing an ad one thousand times. Why ad space is priced per viewing, what moves the price, and why Ailumic publishes no price list.

  • Banner, native or full-screen: which ad format should a small business choose?

    A banner runs beside the content, a native ad sits in the feed, a full-screen ad fills an app between pages. How to pick one for the ad you have.

  • How do I read an ad report?

    Read an ad report in order: times shown, clicks, cost, then where and when it ran. What the click-through rate tells you, and what to change next.

  • How long should an ad campaign run?

    Run a first ad for a full week and no longer than it takes to learn one thing. Why a week, why not months, when to stop early and when to add budget.

  • What is programmatic advertising?

    Programmatic advertising is ad space bought by software, one viewing at a time, in an auction. What it replaced and what it means for a small business.

  • What is a DSP, or demand-side platform?

    A DSP is software that bids for ad space on an advertiser’s behalf. How it differs from an ad exchange and a supply-side platform, and where Ailumic fits.

  • How do ads in mobile apps work?

    An app sets aside ad slots, sells each one in an auction as it is about to appear, and draws the winning ad. What an advertiser chooses and sees afterwards.

  • How do I write an ad for my small business?

    Write one message for one kind of person, say what to do next, and cut the rest. How to fit it to a banner, native or full-screen ad, and when to rewrite.