How much should you pay for an advertising campaign?

The budget required to start an advertising campaign on the various advertising platforms, such as LinkedIn, Facebook Ads, Google Ads and Microsoft Ads (formerly Bing Ads), can vary widely. There is no precise, fixed answer, as costs depend on the platform and the type of business.

Facebook/Instagram Ads

Advertising campaigns on Facebook and Instagram tend to cost less than those on LinkedIn. This is because LinkedIn is a more professional environment, with a different and, arguably, more demanding audience. Therefore, on LinkedIn we should also expect higher costs at the content level. 

Cost differences between Google Ads campaigns

Let's take Google Ads as an example. Whether you decide to invest in a YouTube video campaign or a search (Search) campaign, the costs will be different. A Search campaign may have higher costs than a display or video campaign because users searching for something on Google often already know what they want to buy and are closer to making a purchase decision. In contrast, a display or video campaign on YouTube might reach a user who does not yet feel that need and is simply browsing for leisure. In this case, the goal is to stimulate the user's interest with a well-designed ad.

Types of ads on YouTube

On Google Ads, a YouTube video campaign can include several types of ads:

1. Skippable in-stream announcement: can be skipped after 5 seconds and costs between €0.04 and €0.10.
2. Unskippable in-stream announcement: lasts a maximum of 15-20 seconds and cannot be skipped, ideal for short but important messages.
3. Bumper ads: last 6 seconds and cannot be skipped. They are perfect for branding campaigns where the message needs to be concise and memorable.

These ads charge per display. In contrast, in the search (Search) campaign, costs can be as low as €0.50 per click, but it depends greatly on the industry. For example, in very competitive industries such as catering, hospitality, or insurance, costs per click can be very high.

TikTok Ads

TikTok Ads is emerging as a very effective advertising platform for reaching a young, highly engaged audience. The costs of a campaign on TikTok vary depending on the type of ad chosen and the desired reach.

For example, TikTok requires a minimum daily budget of about €20 per campaign, while actual costs per thousand impressions (CPM) can range between €1 and €5. In-feed ads, which appear in users' "For You" feed, can have an average cost per click (CPC) of between €0.10 and €1, while TopView Ads, which provide maximum visibility by opening the app, have significantly higher costs. It is particularly suitable for branding and awareness campaigns because of its ability to create engagement and virality. Even with a modest budget, it is possible to achieve a high number of views and interactions, making TikTok an attractive option for brands aiming to gain a younger audience.

Budget management and optimization strategies

It is important to start with a low budget and gradually increase it if few results or impressions are observed. In this way, wasted resources are avoided. If a campaign does not work as expected, there could be many reasons: too narrow a target, incorrect demographic selection, too small a location, or exclusion of certain devices. You need to make adjustments, test and optimize the campaign accordingly.

 Microsoft Advertising as an alternative

Microsoft Advertising (formerly Bing Ads) can be a viable alternative to Google Ads due to lower costs. In addition, it is possible to import campaigns directly from Google Ads. However, Google has a much larger market share in Italy, so you have to evaluate which platform is convenient to use.

The importance of testing in digital marketing

In digital marketing, the only way to figure out what works is to test. There are many variables, and there is no right answer or universal benchmark to define the right amount of a campaign, cost per click (CPC) or cost per thousand impressions (CPM). Some methods and formulas can help, but each case is unique.

Practical example of CPC calculation

Assume a client entrusts us with a budget of €450 and the average CPC is €0.70. To calculate the number of clicks achievable with this budget:

This means we might get about 640 clicks. If we notice few impressions or results, we may have set the CPC too low for our region or industry.

Calculation of impressions and coverage

To calculate the impressions (total views) of a campaign, we use CPM. Let us assume a CPM of €0.80:

To calculate the coverage (unique users reached), we assume a frequency of 3:

Thus, we will reach about 187,500 unique users with our campaign.