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17 Oct

A Simple Guide to How Digital Advertising Budgets Work

What elements do you need to consider when budgeting for digital advertising?

There are five terms that are worth clarifying: 

  1. You: A company wanting to show your adverts to an audience
  2. Your competitors: Who want to show their adverts to the same audience
  3. The Ad Platform: Such as Google or LinkedIn
  4. The User: Any person using the platform to look at content e.g. browsing LinkedIn 
  5. Ad-Space: A window of opportunity in that content where an advert can be show to that user

What determines who sees my advert? What determines when I spend money? 

Users (members of your audience) will use the platform by browsing LinkedIn, searching Google or reading online content like news or blogs. 

On every page your potential customer sees, there is ad-space (A space where an advert can appear). 

Whenever ad-space appears, the platform does four things: 

  1. Targeting: It works out what type of person is looking at that ad space
  2. Bidders: It makes a list of all the companies (including you and your competitors) that want to show their advert to that type of customer
  3. Auction: It uses everyone’s campaign and budget settings to see who will pay the most to fill that ad-space. The cost is normally in the low pence e.g. £0.30
  4. Display: It displays that advert (hopefully yours) and deducts that £0.30 from your budget

This happens thousands of times a minute. 

So, if you have 10,000 users who look at LinkedIn every lunchtime, you might have 10,000 chances a day to show them an advert. 

Assuming you win half of that ad-space, 5,000 people will see your advert. The platform will charge you £0.30 x 5,000 people i.e. £1,500.

Can you tell me exactly what I’ll get for my digital advertising budget? 

There’s no way of knowing exactly what you’ll spend from your digital advertising budgets or when because: 

  1. We don’t know exactly when users will use the platform or how long they’ll spend browsing
  2. We don’t know how many competitors are bidding for that ad-space or how much they are willing to spend

We manage this by setting time limits and budgets. This way, the system keeps bidding until the maximum number of people have seen your advert for the money you are willing to spend. 

The platforms will give a forecast, which helps to plan budgets, but they can’t know exact figures.

At DS.Emotion, we understand that digital advertising can seem complex. Our expert team takes the guesswork out of the process by crafting targeted, cost-effective campaigns designed to maximise your reach while staying within budget. Whether you’re looking to engage your audience on platforms like Google or LinkedIn, we’ll ensure your brand stands out and drives results. Let us handle the technicalities so you can focus on growing your business.

Get in touch with us today to explore how we can elevate your digital presence.