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SmartScout Glossary
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Ad Daily Budget

Ad Daily Budget

Defining an Advertising Daily Budget

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An advertising Daily Budget is the amount of money spent in one day on advertising for a product or service. The amount can be set specifically, which assumes a regular rhythm of sales. It is also possible to set an average daily spend over a period, which can be adjusted if sales rise and fall.

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Advertising daily budget as an average

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The daily budget will run for the duration of a campaign. However, because sales rise and fall, the advertising daily budget should be set as an average of daily spend on advertising over a week.

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If you are looking at the idea of an average daily spend, the amount of the daily budget may be less on one day or higher on a day or two. You will need to project sales for one week and then work out what the weekly budget should be and divide it by seven. This sets a daily budget.

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For example

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If your daily budget is- $8.50, the weekly average will be 7 x %8.50 = $59.50. However, the actual weekly costs may look like this:

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Sunday                 $7.50

Monday               $8.50

Tuesday               $9.50

Wednesday        $10.00

Thursday              $6.50

Friday                    $8.50

Saturday               $9.00

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The daily advertising budget has varied, but the week still costs the same as though an average of $8.50 is projected.


Daily budget vs lifetime budget

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There are two time periods over which an advertising budget can be set: lifetime and daily.

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An advertising daily budget can be quite restricting because you need to set it quite precisely and it needs to be revised every week.

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A lifetime budget, on the other hand, looks at the average spend over the lifetime of a product or service. This means that there may be quite a lot of flux in the amount spent each day.

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The daily budget relies quite heavily on a steady rhythm of sales, but it also allows you the flexibility in the long run to change the amount spent on advertising week-by-week.

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Setting the advertising daily budget as part of the overall budget

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A useful way to look at setting your advertising daily budget is to look at your whole budget for the campaign for that particular item. Divide this by the planned time period over which the campaign will run. This will give you quite a clear picture of what a daily budget should be.

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Because there are often hidden costs, it may be useful to set a daily budget that is lower than this price. This will also allow you to change the advertising daily budget if sales decline, and you need to increase advertising, or if sales rise more quickly than projected, and you can afford to cut back on some advertising.

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