Seasonal ad budget maths: setting a different ceiling for every month

Step 1: work out what a job is worth

Start with your average job value. Use the last 12 months if you have them, and split by season if your work changes a lot.

For example, a shoreline plumbing and water-systems business might find:

• spring openings and repairs average $550
• summer repairs and upgrades average $900
• fall closings average $400
• winter emergency calls average $700

If you prefer to work on margin, multiply each by your gross margin. At 45% margin, a $550 job contributes about $248 toward overheads and profit.

Step 2: decide what you can afford to win one job

Your affordable cost per booked job is the most you'd pay in advertising to win one job and still be glad you did.

A practical way to set it: take your gross profit per job and decide what share you're willing to spend. If a $550 job brings $248 of gross profit and you're willing to spend about a third of that, your ceiling is roughly $80 per booked job.

Higher-value or repeat-prone jobs justify a higher ceiling. A customer who will book an opening and a closing every year is worth far more than a single visit, so you can afford to pay more to win them the first time.

Step 3: convert cost per job into cost per click or lead

Ads charge per click or per lead, not per booked job, so you need two more figures.

• Contact rate: the share of ad clicks that turn into a call, text or email. Many trades see somewhere between 5% and 15%, but check your own data.
• Close rate: the share of those contacts that become booked jobs.

If 10% of clicks contact you and you book 50% of contacts, then 1 in 20 clicks becomes a job. With an $80 ceiling per job, you can afford to pay up to about $4 per click on average. If clicks in your area cost more than that, either your ceiling, your site's contact rate or your close rate has to improve.

Step 4: map your capacity month by month

This is the step most owners skip. How many extra jobs can your crew take each month beyond what referrals and repeat customers already supply?

Look at last year and be honest:

• months where you turned work away have little or no spare capacity
• months where the crew was underused have lots
• shoulder months usually have some

Write a number for each month.

Step 5: multiply, then sanity-check

For each month, multiply your affordable cost per booked job by the spare capacity. That's your ceiling.

Then check it against reality. If the ceiling is very small, ads probably aren't needed that month except to protect your brand. If it's large but clicks are expensive in your towns, start lower and raise it as data comes in.

A full worked example

Here's a sample year for a small shoreline trade serving Oro-Medonte, Ramara and part of Barrie. The figures are illustrative; use your own.

The total is about $10,190 for the year. Spread evenly, that would be roughly $850 a month. But an even split would overspend in May, June, September and October, when the crew is already full, and underspend in March, April and August, when the pre-season work is won.

Note that the biggest budgets fall before each peak, not during it. That's the pre-booking principle from our marketing calendar guide, expressed in dollars.

Warning signs you're overspending

Watch for these in your reports. Any one of them suggests the budget is ahead of your capacity or your conversion.

• Missed calls rising. Paid clicks that hit voicemail are wasted money.
• Cost per booked job climbing in peak weeks. You're bidding against everyone for jobs you can't easily fit in.
• Bookings weeks out. If new customers are waiting a long time, ads are generating demand you can't serve promptly.
• Leads from towns you don't serve. Location settings need tightening.
• Clicks on irrelevant searches. The search terms report should be reviewed every month.

Revisiting the numbers each month

A budget built in January is a forecast, and forecasts drift. Set a fixed day each month, say the first Monday, to compare what you planned with what happened.

Check four things: actual cost per booked job, actual close rate, how many calls were missed, and whether the crew's real capacity matched your estimate. If the cost per job came in under your ceiling and you still have room, raise next month's budget a little. If it came in over, look first at the website and the phone before cutting spend, because a low contact rate or slow replies are often the cause. Small monthly corrections beat one big rethink at the end of the season.

Using the numbers with an agency

Whether you work with us or anyone else, bring these numbers to the first conversation. An agency that can't explain how its proposed budget relates to your job value and capacity is guessing.

Our Google Ads service builds the budget this way and reviews it monthly. If cottage owners are a big part of your business, the guide to reaching absentee cottage owners covers targeting people who search from the GTA. Plan prices, separate from ad spend, are on the pricing page.