This question comes up every now and then, and I want to address it. Is there a certain percentage of your budgetA budget is an amount you're willing to spend on your Facebook campaigns or ad sets on a daily or lifetime basis. More that you should set aside for remarketing to current customers and website visitors?
This is actually a fun example of content that was inspired by questions given to my AI chatbot. I didn’t like the answer that my bot gave, but the reason its answer was insufficient is that this is a topic I haven’t discussed much.
The solution: I need to write about it and train that bot on my approach to a remarketing budget.
Here are some factors to consider…
1. The 80-20 Rule (with caveats)
People love rules of thumb and round numbers. When it comes to applying a percentage of your budget to remarketing, start with the 80-20 rule: Dedicate 80% of your budget to cold audiences and 20% to remarketing.
But as you will see below, this is just a starting place. I want you to feel comfortable with some sort of direction. But adjust this approach depending on the factors we’ve discussed here.
2. What is Your Total Budget?
This matters a lot.
The lower your budget, the more you should consider dedicating to remarketing. Why? Because it’s the low-hanging fruit.
Let’s say that your product costs $500 and you have a $10 per day budget. You might not sell a single product in one month targeting a cold audienceThis is the group of people who can potentially see your ads. You help influence this by adjusting age, gender, location, detailed targeting (interests and behaviors), custom audiences, and more. More. Not to mention, we want to exit the learning phase if we can (obviously, that’s an impossibility in this case).
I’m not saying you shouldn’t try targeting a cold audience in this example. Feel free. But you’re probably not going to make much progress. If so, you’re most likely to get results by focusing on remarketing:
- Existing customers
- Website visitors
- People who abandoned cart
On the flip side, let’s say that you have a $1,000 per day budget. It’s possible you would then dedicate more of your budget to the cold audience than normal, especially if your remarketing audience is small.
And that takes us here…
3. How Large is Your Remarketing Audience?
Let’s say you’re told to spend $200 per day on remarketing. Yet, you have a new business with no email list and virtually no website traffic.
That doesn’t make sense, right? You’re going to exhaust that audience very quickly and the effectiveness of your remarketing ads will tank in a hurry.
Granted, if you’re spending $800 per day on targeting cold audiences, your remarketing audience will come directly from your advertising traffic. But you should still start small and build with time.
On the flip side, maybe you get 500,000 website visitors per month and have an email list of over 100,000 people. If you aren’t spending significant money reaching these people, you’re missing out.
If you have a group of people who have shown interest, have bought before, and are likely to buy from you now, it’s your responsibility to reachReach measures the number of Accounts Center Accounts (formerly users) that saw your ads at least once. You can have one account reached with multiple impressions. More them.
4. Are Repeat Customers Common?
Of course, this has an impact as well.
If you sell coffee beans and have a significant list of customers, these are people who are likely to buy again and again and again. Their supply runs out and then they need you again. They may buy for themselves and for friends.
In that case, remarketing may take up a greater portion of your budget. These are people you want to continually go after.
But if you sell one piece of software, the approach is different. Once someone buys that software, there may be no reason to buy again unless you have an upgrade or other, related software.
This time, your customer list isn’t all that helpful for targeting. Once they buy, you’ll likely want to exclude them from targeting. Your remarketing is then isolated to recent engagement and website visitors, rather that current customers.
5. How Effective Is It?
This might be most important.
How profitable is your advertising when you target cold audiences? If it’s super profitable, your unreached audience is nearly unlimited. Spend more, if you can.
On the flip side, if your cold audience targeting is mostly burning money but your remarketing works, it may make sense to push more of your budget to remarketing — assuming you have the audience size to sustain that higher budget.
It’s a balance. You want new customers. You want to run profitable advertising. Adjust these dials to find the right combination.
Remarketing is Still a Thing?
I should address this. Some people have made the argument that with the advancements in broad targeting, you no longer need to dedicate any of your budget to remarketing.
I do agree that the effectiveness of broad targetingIn most cases, mention of Broad Targeting refers to the removal of all potential targeting filters: No custom audiences, lookalike audiences, or detailed targeting. Instead, rely only on location and letting the algorithm do the work. More does impact remarketing. The reason broad targeting works, as far as I can tell, is that the algorithm knows to go after people who visit your website and engage with you. So, that remarketing is built-in.
Personally, I rarely do any “general” remarketing any more. This is when you target all of your website visitors or all people who engage with your Facebook page.
Instead, most of my remarketing is for extremely small, but hyper-hot audiences. That would include abandoned cart scenarios or any other groups of people who have proven to be extremely valuable.
Sometimes these valuable groups are found in surprising places. One group I go after with great success is those who watch my Reels.
Watch Video
I recorded a video about this, too. Check it out below…
Your Turn
How do you distribute your budget between cold and warm audiences?
Let me know in the comments below!
