Behind every effective advertising campaign is a well-thought-out strategy with a well-allocated budget to back it up. Strategy is the vehicle. Budget is the fuel. You need both to get where you’re going.
But where do you want to go?
In this short guide, we’ll cover the basics of ad budgeting and strategy to help you get the most out of your ad spend, drive conversion goals and revenue, and make improvements if your ads are underperforming.
Understanding the basics of strategy and budget is crucial to running high-performing ads and achieving business objectives. Whether you advertise in-house or outsource to an agency, you need to know these steps.
Define your ad goals
Setting clear objectives is the foundation of an effective ad budget. Start by determining your primary goal:
- Are you looking to increase brand awareness?
- Generate direct bookings?
- Promote a specific tour package?
This will influence where and how you spend. Remember, you can only have one primary goal. There’s nothing wrong with additional benefits–like generating awareness on the back of a campaign focusing on conversion–but trying to do two things at once, and do them equally well is a recipe for frustration and underperforming ads.
There are two main goals to consider for your next campaign: Awareness and conversion. Each has pros and cons, and choosing one will determine what your channels do with your ad spend.
Awareness
Investing in display ads through Google Display Network or social media platforms might be ideal for operators looking to grow brand recognition. This campaign type is typically priced on a CPM (cost per thousand impressions) basis.
In essence, the CPM model means the advertiser – in this case, you – will be charged based on each 1000 advert “impressions”. This boils down to every 1000 views on your ad will result in the cost being racked up in your campaign.
Awareness campaigns are designed to maximise your brand exposure to as many relevant audience members as possible. Each platform – Google Display Network (GDN), Facebook (Meta), TikTok, X, and other social media platforms – will determine impressions uniquely. It also provides you with different levels of granularity and features in its tools for refining your ideal audience.
A limitation of this model is that engagement with an awareness campaign isn’t a guarantee – which is fine because it isn’t designed to boost engagement! Awareness campaigns are all about getting word out about your brand, after all, which can mean a lot of eyeballs, but little action.
Conversions
Conversion-focused strategies differ significantly from Awareness campaigns.
Increasing bookings and other conversion actions is the primary goal – a goal which can be achieved via display advertising and, more commonly, search advertising.
Conversion-based campaign ads typically use PPC (Pay-Per-Click) attribution models to bid on clicks from high-intent audiences. This is because it isn’t enough to pay to maximise your reach, as that doesn’t optimise conversions. Instead, using a PPC lets you judge your advertising campaigns’ success – and cost – based on their ability to engage potential customers.
One of the most powerful sides to this is in Search campaigns. Search campaigns are absolutely crucial to maximising conversion goals, whilst remaining within budget. Efficiency is the name of the game here, as each click will rack up the cost of the campaign.
Where display ads rely primarily on signals from users to determining whether they slot into your audience demographic, Search campaigns combine this with their active search behaviour – identifying and capitalising on keywords.
It’s tempting to presume more clicks = more conversions, but this is rarely ever the case. Unrefined audience/keyword targeting, low budget, and restricted bidding targets can all add up to a disastrously low return on investment where Conversion campaigns are concerned.
When using search advertising on platforms like Google Ads, Microsoft Ads, and others – knowing your audience is an absolute must for optimising performance.
Audience
Knowing the ins and outs of your audience is critical to successful advertising campaigns – especially in the digital space.
Ask yourself a few questions about your audience. The answers will form the basis of your strategy going forward.
- Who are you trying to reach?
- Where do they hang out online?
- How do they engage with content on that platform?
Once you have your answers, ask yourself: How do these audience insights relate to your advertising goals?
Creative is king
We could do a whole series on creative best practices. For now, we’ll just mention how your creatives impact budget and strategy.
The bottom line is bad ads are expensive ads. Google and other channels have ways of knowing if your ads are falling short of their performance benchmarks.
Paying attention to metrics like Quality Score is important for maximising your return on investment when running advertisement campaigns on Google Ads. Optimising ad copy, landing pages, and keyword targeting are all involved in quality score ratings – simply put, the higher your score, the better your ads perform – at a lower CPC (Cost-Per-Click).
Getting your creatives dialled in could be as simple as changing the headline or the image. This isn’t about creating works of art, it’s about making content that connects with your audience, and fast. Try changing your creatives if you’re not getting that connection (clicks).
Set your ad budget
Ad spend for operators varies significantly based on goals, market size, and competition. Here are some general guidelines:
Awareness, CPM budget
Industry experts suggest an initial monthly budget of £500–£1,000 for smaller operators testing the waters. Larger operators may budget up to £5,000 or more per month for broader campaigns.
But the reality is that the sky is the limit as long as you are working to a budget you can afford, and optimising your goals.
Cost Per Click (CPC) budget
Travel-related keywords can be competitive, with average CPCs ranging from £1 to £3 for general terms to £10+ for high-intent phrases like “SoHo walking tour.”
Each click will generate cost – but bidding on relevant, high-intent keywords will likely bear a better quality conversion, justifying the higher CPC.
Return on Ad Spend (ROAS)
A good ROAS benchmark is 3:1, meaning for every £1 spent, you’d aim to generate £3 in revenue. Track this metric and adjust based on performance. This is the most important number in advertising, it will tell you what’s working, what’s not, and where to allocate your budget moving forward.
Choose your ad channels
Each platform has unique strengths for targeting specific audiences and running different types of ads:
Google
Google’s Search and Display ads are ideal for capturing high-intent traffic–people who are looking for exactly what you’re offering or related keywords.
Google Ads is the most powerful advertising platform online. It’s highly competitive, but more than 8 billion searches occur on Google each day – so there’s a lot of opportunity.
Search Ads allow your advertisements to show up during Google Searches that align with your keyword and audience specifications. Whereas, Display Ads allow your visual adverts to pop up during your potential audiences’ online journeys – on websites.
Use Search ads to target users actively searching for tours and Display ads for broader reach to increase awareness, or to showcase visuals on relevant websites.
Facebook and Instagram (both a part of Meta) are perfect for showcasing video, images, and user-generated content. With flexible targeting options based on demographics, interests, and behaviours, social platforms are great for reaching niche audiences.
This can be a powerful tool for boosting awareness, and for potential conversions.
OTAs
Many operators also run ads on Online Travel Agents (OTAs) like TripAdvisor or Viator. Ads here can be effective, as they help you get in front of high-intent prospects who are close to making a purchase, but bear in mind the added commissions when calculating ROI.
However, it can be worth the cost to reach such valuable, high-intent traffic.
Make seasonal and demand-based adjustments
Tours are often seasonal, and your ad strategy should consider this. To maximize ad performance, consider adjusting your budget seasonally. For instance:
- Peak season: Increase spend during peak booking periods for your market to capture demand and remain competitive against other advertisers.
- Low season: Reduce ad spend during off-peak months or experiment with retargeting ads to stay top-of-mind. Off-season offers are a great way to test ads and incentivise conversions.
Key metrics like click-through rate (CTR), conversion rate, and ROAS can help guide your ad spend and strategy adjustments.
Use A/B testing to determine which messages, visuals, and calls to action are most effective. When you have some data from these tests, throw your budget at the ads that work and cut the ones that don’t.
Sample budget allocation
For a monthly ad spend of £2,000, a balanced distribution might look like this:
Google Search Ads: £800 (high intent traffic)
Social Media Ads (Facebook/Instagram/TikTok): £600 (engagement and awareness)
Retargeting Ads: £300 (target users who previously visited your website)
OTA Ads (optional): £300 (targeted visibility on booking platforms)
Just remember, if you don’t provide enough budget per platform, then it can result in your entire advertising portfolio underperforming…
If you can’t afford to run on every platform simultaneously, then it can be better to test them individually, with a full budget, to ensure you remain competitive.
Stay flexible, and keep learning
There is no “one size fits all,” “set it and forget it” approach to advertising. Ad strategy is an iterative process and a learning experience no matter what kind of budget you’re working with.
A thoughtful, data-driven approach to advertising enables tour operators to make the most of their budget while reaching relevant audiences. Operators can build a sustainable advertising strategy that supports growth and efficiency by continually assessing campaign performance and reallocating the budget accordingly.
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