How to Set an Ad Budget Without Wasting Money

Running ads without a plan is like throwing money into the wind. As a business owner, you’ve likely asked yourself, "How much should I actually be spending on ads?" Here’s a simple framework to help you decide—without getting lost in spreadsheets.

1. Know Your NumbersStart with your Customer Lifetime Value (CLV). If one customer brings you $1,000 over a year, and you’re willing to spend 30% to get that sale, you can afford to spend up to $300 to acquire that client.

2. Set Clear GoalsAre you trying to build awareness? Drive leads? Make immediate sales? Your budget should reflect the goal. Awareness campaigns typically require more spend up front. Direct-response ads can be leaner but need creative that converts.

3. Start Small, Scale SmartYou don’t need to go all-in on Day 1. Start with a test budget (e.g., $500–$1,000) and see what works. Scale what’s working. Kill what isn’t.

4. Track Performance WeeklyCost-per-click, cost-per-lead, return on ad spend (ROAS)—know your metrics. You’re not just spending money. You’re buying data. Use it.