How to set a marketing budget (and why ads don’t work)

Marketing is a broad term. It includes communication, branding, visual identity, and strategy.

In this article, we’ll focus on a narrower topic: paid advertising.
How to make it profitable. How to increase conversions. And why ads work in the first place.

If you only care about the budgeting part, jump to “How to Set a Marketing Budget” below.

Basic Concepts You Must Understand

Before you spend even €1, you need to understand two things:

CPC (Cost Per Click)
The price you pay for one click on your ad.

Conversion
The action you want from the user: a purchase, signup, call, or message.

A click is not the goal. A conversion is.

You can have 10,000 clicks and zero sales.
That’s not marketing. That’s an expense.

How to Set a Marketing Budget

The formula is simple:

Cost of goods + desired profit + ad cost = final product price

This is your foundation. Without it, you’re guessing.

Example:

• Cost of goods: €20
• Desired profit: €10
• Ad cost per sale: €5
• Final price: €35

The key question is:

How much does one conversion cost you?

If one sale costs you €5 and you earn €10, you are profitable.
If it costs more than you earn, you are losing money.
Simple.

Why Paid Ads Often Don’t Work

Consumer behavior has changed.

People moved online and got used to speed and clarity. Companies like Amazon, Shopify, and DoorDash raised the standard.

Today, users don’t want to call.
They don’t want to ask questions.
They don’t want to search for extra information.

If they don’t understand immediately, they leave.

If you send them to a messy, unclear homepage, you lose them.

They know there’s a better option.

Younger generations especially avoid direct communication. They click, scan, and decide. Or leave.

Where the Real Problem Starts

Most people don’t fail at ads.
They fail at the destination.

Real example:

A friend of mine started a business. He heard Google Ads works. He set up campaigns, keywords, and a budget.

He sent all traffic to his homepage.

Result:

• €1,500 spent
• 8,000+ clicks
• 0 conversions

The problem?

An average website.
A generic homepage.
Unclear offer.
No clear next step.

Users came, looked around, and left.

The Solution? A Sales Page

A sales page (landing page) has one goal:
one message, one action.

No distractions. No confusion.

Everything leads to conversion.

If you want to learn more about this, check out: 5+1 tips for a better landing page.

When my friend realized this, he changed his approach.

We built him a simple landing page focused only on the service he offers.
At the same time, he learned the basics of Google Ads and started running campaigns himself—no agency involved.

The result?

With just a €300 budget, he got real customers.

The difference wasn’t the ads.
The difference was the page.

Why Landing Pages Work

• Clear offer
• Focus on the user’s problem
• Short and direct explanation
• Proof (reviews, results, testimonials)
• One clear call to action

The user doesn’t overthink.
They just follow the flow and decide.

A Small Hint for Serious Players

If you want even better results, there’s a next level:

Remarketing and pixels.

This means you “track” users who visited your site and show them ads again.

These people have already shown interest, so they convert much more easily.

This can dramatically increase conversions.

We’ll cover this in detail in the next blog post.

Quick Summary: How to set a marketing budget (and why ads don’t work)

Your marketing budget is not a random number.

It’s calculated.

But even the best budget won’t help if you send people to the wrong place.

Ads bring people.
Landing pages convert them.

If you’re already spending money on ads, it only makes sense to have a page that justifies that investment.

Otherwise, you are just paying for clicks.

Boldizar S. Santo (Co-Founder)