Many B2B marketers look at Impression Share Lost (Budget) to decide how much to spend. But does that number truly reflect your ideal budget? Not always. Relying solely on this metric can mislead your strategy and leave profit on the table.
Why This Matters
Impression Share Lost (Budget) shows how often your ads could have shown but didn’t because of budget limits. If you see 50%, it means you could be missing half your potential audience. But this ignores other factors like conversion quality, customer lifetime value, and the true costs to serve your market.
The Real Problem with This Approach
Using impression share data as the main guide can cause you to underspend or overspend. You might increase your budget to chase lost impressions without knowing if those impressions turn into revenue. Alternatively, you may overspend chasing visibility that doesn’t bring profitable leads.
How to Fix It
The key is to combine impression share insights with a strategic view of profitability. Focus on the lifetime value (LTV) of your customers and the actual cost per acquisition (CPA). This helps you determine a budget that’s aligned with true growth rather than just impressions.
Step-by-Step Approach
- Calculate your ideal CPA: What’s the max you should pay per customer that still allows profit?
- Assess your LTV: How much revenue does a customer generate over their lifetime?
- Set a target CPA based on profitability: Use your LTV to determine the maximum CPA you can afford.
- Match budget to conversion data: Combine your CPA goal with your historical conversion rates to estimate the necessary spend.
- Monitor beyond impressions: Track actual conversions, revenue, and profit, not just ad visibility.
Actionable Tips
- Don’t make budget decisions based only on impression share lost; include conversion data.
- Focus on customer lifetime value to set realistic budgets.
- Use profit-based metrics like ROI to guide your ad spend.
- Adjust your budget dynamically based on actual performance, not just impressions.
- Keep testing different scales of spend with a clear profit goal.
Remember, impression share lost (budget) is a useful piece of the puzzle, but it shouldn’t be the whole story. Your budget should be driven by what will actually grow your profit, not just increase visibility.