Is your ad spend going to waste? 6 signs of a problem
A classic scenario: advertising is running, clicks are coming in, but sales are not. Marketers complain about ‘bad salespeople.’ The sales department claims that advertising attracts the ‘wrong people.’ And while they figure out who is right and who is to blame, the business loses money. In smaller companies, where one person often sets up advertising and sells, it is even more difficult. How can you understand where the problem lies: in leads, creatives, the website, or the funnel?
Internet advertising seems convenient: everything is well calculated and tracked. We know who was looking for what. We see impressions, clicks, and applications. But does advertising really work? Or does it just eat up the budget? Betonlogos Czech Republic has identified six signs to check your advertising budget.
What to do:
- Calculate unit economics: what portion of the revenue from the sale of goods or services will be net profit after deducting all variable costs.
- Link applications to sales — CRM and end-to-end analytics.
- Take into account returns, discounts, and expenses.
- Calculate not only the cost of a lead, but also its return on investment.
High CTR, lots of clicks, zero orders. Where is the chain breaking? Keep track not only of clicks, but also of what happens afterwards. If the user left the site immediately and nothing kept them there, then the problem lies in the advertising, landing page, or offer. Filled out the form, added to the basket, but didn't buy anything — the problem is already in sales. They click, but don't leave their contact details — the landing page is to blame.
What to do:
- Set up micro-goals in analytics: page scrolling, clicks, form filling
- Track at what stage users ‘leave’ — perhaps the form is not working or there are unnecessary distractions
- Calculate the cost of each step: click, transition, contact, sale
For conflicting departments, Betonlogos company recommends introducing the concept of a ‘qualified lead’ (for example, a customer filled out the necessary form, left their number and answered a call or chat, or performed any other action and did not leave). Then the effectiveness of advertising and marketing can be assessed by the number and cost of such leads. And sales performance can be evaluated by how many of the qualified leads resulted in a deal.
The money has arrived, the order is closed - everything seems fine. You can spend months ‘rejoicing’ over orders that are eating away at your business from the inside. The losses accumulate over time. Sound familiar? Does advertising work? Yes and no. Even excellent indicators such as CTR or low cost per click are meaningless if the sale is not profitable.
You need to understand exactly how much you earn from each sale and how much it costs to attract a single customer.
1. How much does a customer cost?
2. Intermediate metrics
Advertising expenses need to be planned in advance, taking into account the seasonality of the business, when net profit is low or non-existent. The easiest way is to set a clear and fixed percentage of turnover or gross profit in advance.
Large stores spend up to 20% of their turnover on advertising. That's a lot. But it works: people see them, know them, and buy from them. Small businesses cannot afford this. But if advertising is just a line in Excel, you're already losing.
What to do:
- Link your advertising budget to turnover (5–10%) or profit (10–20%).
- Prepare in advance for seasonal downturns and peak periods.
- Take into account margins, seasonality and competition.
3. A budget without flexibility
4. Creatives have not been tested
A working creative is not one that you ‘like,’ but one that has been tested and has generated the best response. If you have not compared texts, images, and offers, then you do not know what really works. Run at least three ad variations and disable the ‘weak’ ones after two to three days.
What to do:
- Run A/B tests (even the simplest ones)
- Check the response
- Evaluate CTR, conversions, and cost per click
If the website loads slowly, is overloaded or inconvenient, the user will simply close the tab and leave. Money has been spent on advertising, but no deals have been made.
What to do:
- Remove everything unnecessary. One screen = one action
- Test the path yourself: advertisement-click-website-application
- Check the loading speed.
There are no eternal audiences. Even the hottest segment becomes mundane over time. Showing the same ads to the same users without changing the creative is a surefire way to lose interest. People get tired, algorithms stall.
What to do:
- Use segments: new, warmed up, retargeting.
- Launch Look-Alike — similar to your customers.
- Update creatives and audiences every 1–2 weeks.
‘The whole is always greater than the sum of its parts’ Aristotle. All complex processes are based on simple and obvious actions. Betonlogos marketing specialists automate routine processes in the businesses of our customers and partners. We help find new customers. We select promising products from trusted manufacturers and optimise supply chains.
5. After clicking - silence
6. Audiences burn out
No unnecessary routine
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