How Much Should You Spend On Advertising?

I was going through my old paperwork when I was cleaning out my office and I found a list that I'd made comparing my advertising costs for 2006-2008. There was about a $400 range, but for the most part I was spending around $3000 a year for ads in local wedding guides, my website, and something that I had to look up to be sure what it was. It turned out to be an early online wedding planning site for local brides, but it no longer exists.

I did a few quick searches to see if there was any type of guideline about how much you should be spending on advertising, and I found a range from 4-10% of your gross income depending on what industry you're in. I do know that I never spent that much, but I'd have to go dig out my old tax forms to see the exact percentage.

I do notice, as I look at the changes I made each year, that I dropped one media outlet each year and added a different one. The most important thing that you can do is to keep track of the return on your investment in each place that you put your money into. You have to make sure that what you're paying for is working.

When the Knot started their local website for my area years ago, they sold me an ad at a really low rate since it was a new region for them. When the time came to renew I had decided not to, because I wasn't getting enough traffic from them to make it worthwhile. I knew this because I was monitoring my own traffic using my website analytics.

When I told them that I wasn't going to renew, they emailed saying that they were sending me huge amounts of traffic, and I should renew immediately! I wrote back asking where they were seeing that, since I didn't see it on my end. For some reason, they didn't email back.

With all of the advertising options out there now, you're going to get a lot of solicitations from various marketers trying to get you to spend your money with them. The important thing is to make sure that what you spend increases your profit by more than the spend. If you spend $5000 to make an extra $8000, but your expenses to make the cakes are $4000, You just lost $1000. Here's a sophisticated drawing:

Let's say that you spend $1000 to go to a wedding show. You need to take the cost of attending into account, which is the $1000 plus the cost of your samples, displays, TIME involved, etc. etc. etc. 

So say it was about $1600 total, and about 50% of your gross income is profit. That means that you'll have to book $3200 worth of business as a direct result of that show to break even. You might be able to do that, you might not. 

The best-case scenario, of course, is to pay the least you can to advertise and get a really good return on investment. If an Instagram ad targeted at local brides costs you $200 and brings in $8000 that's really good. If it only brings in $200, that's wasted effort.

So aim for the lowest amount that you can get away with spending, but make sure to track your results. Ask everyone who books with you "how did you find me?" Look at your google analytics to see where your website traffic is coming from. If you pay for an ad, monitor it closely to verify the results. Don't just throw your money at an ad and assume that it's doing its job, you can waste a lot of money that way.

Kara Buntin owns A Cake To Remember LLC,  online cake supplies at and

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