Internet Advertising Tips

How Much Should I Spend for Advertising

When deciding how much money to spend, you will be doing a ROI calculation. ROI stands for Return On Investment. How much of a ROI do you desire and expect?

If you spend $100 on an ad to promote a $33 information product and your profit on this product is $25 net after miscellaneous expenses, you need your ad to bring you in at least four sales just to pay for it’s self.

If you’d like a 50% return on your investment, that means you want to make $50 above expenses, you need to make six sales.

If you’d like a 100% ROI, you need eight sales. (Make sense?)

Knowing your minimum ROI needs is important to helping you decide if an ad campaign worked or not. (If you got less than four sales, it cost you money instead of making you money.)

In some cases, if your goal was to build your mailing list, you don’t really have a dollar amount to judge from, but you should still have a goal in mind.

 

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