How to Budget Advertising Costs Online for Ad Testing

Testing your ad creative can have a multiplier effect on the performance of your overall media budget.

But something many marketers don’t realize is that you don’t have to go out and request more budget to make it happen.

Why? Because your ad testing budget should actually come from your media budget. Somewhere between 10–20%.

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Consider the following:

Without proper testing

You put the full weight of your media budget behind untested or A/B tested ads. In other words, you waste precious marketing dollars by scaling ads that aren’t performing up to their potential.

With proper testing

You take 10–20% of your media spend and you apply it toward multivariate (MVT) testing. You find the right combination of creative assets, boost conversions, drop CPA, and scale the top performers.

Now you’re capitalizing on opportunities you didn’t even know were there. That remaining 80% is going to work so much harder for you. And besides an instant lift in performance and ROAS, there are plenty of long-term, unseen gains realized through automating MVT testing.

(To see how the math checks out for your brand, give our ROAS calculator a spin.)

“What can I test with my budget?”

This is consistently the #1 question we get from marketers. 

Below, we outlined three MVT testing budget scenarios — $1,500, $5,000, and $10,000 — holding all other things equal. This gives you a ballpark idea of the number of creative elements and total ad variants you can test at your level of spend. 

Here are our assumptions across all three budget levels:

• .08% CVR
• $25 CPM
• 7-day test
• 75% detection of very strong performers

And here are the scenarios:

With $1,500, you could test three variant groups with two variables each. This would net you eight total ad variants (2x2x2).

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At $5,000, you could test three variant groups of seven, three, and three variables. This would bring your test to 63 total ad variants.

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And with $10,000, you could MVT test three variant groups of 15, three, and three variables, for a grand total of 135 ad variants.

As you can see, with larger budgets come more testable elements and, therefore, ad variants. With more ad variants comes greater odds of finding winners — either individual creative elements or ads. 

But that doesn’t mean that you can’t uncover powerful insights with smaller budgets. One Marpipe customer saw a 350% increase in add-to-cart rate in an eight-ad test, while another saw a 170% increase in CTR. 

And if you’re wondering, “How in the world is my team going to create that many ad variants?”, don’t worry. Marpipe automates the entire process, from design to test launch.

"Multivariate testing doesn't have to cost $20,000. You can get clear, clean learnings that can impact strategy and revenue with much, MUCH less. We've successfully run campaigns with as low as $1,000 through Marpipe."

— Jack Gierlich, Director of Growth, Trialjectory

How Marpipe helps simplify ad test budgeting

Your overall ad creative testing budget will determine 1) how long you run your test and 2) your budget per ad group. Here are some ways Marpipe automates all of that pesky math for you.

Controlled spend

Marpipe places every ad variant into its own ad set — each with its own equal budget. This prevents Facebook’s algorithm from automatically favoring a variant and skewing your test results in the process.

Two test lengths

Marpipe lets you run either 7-day or 14-day tests. This makes dividing your budget over the quarter or year turnkey. For simplicity’s sake, let’s say that nets out to either 52 7-day tests per year (each using 1/52 of your testing budget) or 26 14-day tests per year (each using 1/26 of your testing budget).

Built-in calculator

Marpipe’s in-platform budget calculator shows you how your test budget breaks down before you launch. So, if you wind up creating more variants than you have testing budget for, you can simply remove elements and shelve them for a future test. (Vice versa, if you find you haven’t included enough variants to hit your allotted testing budget, you can add variables until you do.)

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Multiply the power of your media budget with multivariate testing

Multivariate testing lets you zero in on the ads and assets that actually perform, fast. This lets you scale the winners with confidence, ultimately netting you more conversions with the same media spend. 

When it comes to modern media spend and ad performance, this, as they say, is the way.