Reduce Spend, Increase Impact - As a small business owner, you want your paid ads to bring in new customers without wasting your hard-earned money. The good news is that you don’t need to be a marketing expert to make your ads work harder for you. With a few simple strategies, you can reduce your ad spend while increasing the impact on your business.
This guide will walk you through how to monitor, measure, and optimise your paid ads. By following these steps, you’ll learn to spot what’s working, fix what’s not, and make your budget go further. The focus is on BIG results with minimal investment, helping you gain more customers without overspending.
Download and print the 'Paid Ads Optimisation Checklist'. This way you can mark each task off as you follow each step of this guide.
Why Focus on Monitoring, Measuring, and Optimising?
Paid ads can be a great way to grow your customer base, but only if you’re getting the most out of every penny. Without proper monitoring, you may be spending money on ads that aren’t working. By learning how to measure performance and optimise your ads, you can:
Cut down on waste by stopping ineffective ads.
Improve performance by focusing on what works best.
Grow your customer base with smarter, more cost-effective ads.
What to Expect from This Guide
We’ll break down the process into three simple sections:
Monitor: Learn how to keep an eye on your ads and catch problems early.
Measure: Understand which metrics matter and how to use them to your advantage.
Optimise: Tweak your ads to get better results while spending less.
Each section will focus on practical, easy-to-follow steps that you can implement right away. Let’s get started with how to monitor, measure, and optimise your paid ads for maximum impact!
Step 1: Monitor – Keep Track of Your Ad Performance
Monitoring your ad performance is the first step to ensuring you're not wasting money. It allows you to spot problems early and make adjustments before they impact your budget. Here’s how you can do this effectively with minimal effort.
Set a Clear Budget and Stick to It
How to define a realistic ad budget
Start small: If you're new to paid ads, begin with a modest budget that you're comfortable with. You don’t need to spend large amounts to see results.
Identify your goals: Are you looking to get clicks, leads, or sales? Understanding your goal will help you set a budget that aligns with what you want to achieve. For example, if your goal is to gain 100 new clicks, set your budget accordingly based on the cost per click (CPC).
Use automated tools to cap your daily or weekly ad spend
Most platforms, like Facebook Ads and Google Ads, allow you to set a daily or weekly budget cap. This means you won’t overspend, no matter how many people click your ad.
Action step
In Facebook Ads Manager or Google Ads, go to your campaign settings and input your daily or weekly budget cap. This ensures the platform won’t exceed the amount you’re willing to spend.
Monitor Key Metrics in Real-Time
Which metrics matter
To understand how well your ads are performing, focus on these key metrics:
Impressions: How many times your ad is shown.
Clicks: How many people clicked on your ad.
Conversions: How many clicks led to a sale, signup, or other action.
Cost per Click (CPC): The amount you're paying for each click on your ad.
Use platform dashboards (Facebook Ads Manager, Google Ads) to monitor these metrics:
You don’t need advanced technical skills to track your ads. Most platforms provide built-in dashboards where you can see all the important metrics at a glance.
Action step
In your ad platform, navigate to the performance dashboard (usually in the ‘Campaigns’ section).
Set up a simple view that shows Impressions, Clicks, Conversions, and CPC. This allows you to track performance in real time without getting overwhelmed by too much data.
Use Automated Alerts to Stay Informed
Set up alerts when your ad performance changes
Rather than checking your ads constantly, you can set up alerts that notify you if there’s a significant change in your ad performance. For example, if your CPC suddenly rises or your clicks drop, you’ll receive a notification.
Action step
In Facebook Ads Manager or Google Ads, go to the ‘Alerts’ or ‘Notifications’ settings.
Set an alert for when the CPC increases by a certain percentage or when your clicks drop below a certain number. You’ll receive an email or a notification in the app when this happens.
How to adjust quickly to avoid overspending
Once you receive an alert, log into your dashboard and check what’s causing the change. For example:
If your CPC is rising, you may need to pause or adjust your ad targeting.
If clicks are dropping, review your ad content or audience settings.
Action step
If an alert shows rising costs, reduce your bid amount or tighten your audience targeting (e.g., exclude irrelevant groups).
If engagement drops, try tweaking your ad visuals or headlines to see if that boosts interest.
By consistently monitoring, you’ll be able to keep costs low while ensuring your ads are performing effectively.
Step 2: Measure – Analyse What’s Working and What’s Not
Once you’ve set up and monitored your ads, the next step is to measure their performance. This will help you understand which ads are delivering value and which are wasting your budget. By measuring the right metrics, you can make informed decisions about how to adjust your ads for better results.
Calculate Your Cost Per Conversion (CPC)
Learn to measure CPC and why it’s crucial for controlling your ad spend
Cost per conversion (CPC) is one of the most important metrics when it comes to understanding the effectiveness of your ads. It tells you how much you’re spending to get each new customer, sale, or lead. Lowering your CPC means you’re getting more conversions for less money.
Simple steps to compare spend vs conversions to see which ads bring the most value
Go to your ad platform’s performance dashboard (e.g., Facebook Ads Manager or Google Ads).
Locate the ‘Conversions’ metric – this shows how many desired actions (like purchases or signups) your ad has generated.
Check the total spend on that specific ad.
Calculate your CPC by dividing the total spend by the number of conversions.
For example: If you spent £100 on an ad and received 10 conversions, your CPC would be £10 (£100 ÷ 10).
Action step
Keep track of your CPC for each campaign to understand which ads are providing the best return on investment. Ads with a higher CPC may need adjusting or replacing.
Compare Results Across Ad Variations
How to track and compare different ads (text, images, videos) to see what performs best
Different ads will perform differently based on factors like the text, images, or video you use. To get the best results, it’s important to track the performance of each variation and see which format resonates most with your audience.
Use built-in tools like Facebook’s split-testing or Google Ads' experiments feature to measure effectiveness
Create different versions of your ad with variations in text, images, or calls to action (e.g., one ad might use a bold headline, while another uses a more casual tone).
Run a split test (A/B test) on platforms like Facebook Ads or Google Ads, which allows you to show different ads to different audiences.
Compare the performance metrics: Look at the CPC, click-through rate (CTR), and conversion rate for each ad variation. This will help you identify which version is driving the most conversions for the lowest cost.
Action step
Regularly test new ad variations to see what works best. Focus on small, simple changes like adjusting the image or tweaking the headline to see which has the greatest impact.
Identify Low-Performing Ads
Recognise which ads are wasting money and not bringing results
Some ads simply don’t perform well, and continuing to spend on them can drain your budget. It’s essential to identify these low-performing ads early and stop running them.
Focus on the cost per acquisition (CPA) to see how much each new customer costs you and when to stop running ineffective ads
Check the CPA for each ad: This metric shows how much you’re spending to gain each new customer.
Compare CPA against your target cost: If your goal is to spend no more than £20 per new customer, and an ad is costing £50 per customer, it’s not delivering value.
Identify ads with high CPA and low conversions: These ads should be paused or adjusted, as they are wasting your budget.
Action step
If an ad has a high CPA and isn’t converting, pause it immediately. Then, review the ad to see if tweaking the audience, content, or budget could improve performance, or replace it with a better-performing version.
By measuring your ads effectively, you can make data-driven decisions to cut down on wasted spend and focus your budget on the ads that are bringing in the most value.
Step 3: Optimise – Refine Your Strategy for Maximum Impact
After monitoring and measuring your ad performance, the next step is to optimise your ads to get better results while spending less. By making targeted adjustments to your audience, ad content, and timing, you can maximise the impact of your ads and attract more customers.
Adjust Your Targeting
How to optimise audience targeting to reduce spend while increasing engagement
The more precisely you target your ads, the more likely they are to reach the people who will engage with them. By narrowing down your audience, you can avoid wasting money on users who are unlikely to convert.
Tips for narrowing down demographics, interests, or locations to focus on high-potential customers
Review your current audience data: Use insights from your ad platform (e.g., Facebook Ads Manager or Google Ads) to see who is clicking on your ads. Look at demographics such as age, gender, and location to identify the types of customers who are engaging with your ads.
Narrow your audience: Focus on the most engaged audience by narrowing down your ad targeting to include only the demographics, interests, or locations that perform well.
Use Lookalike Audiences: On platforms like Facebook, you can create Lookalike Audiences based on your existing customers. This helps you reach people with similar profiles, increasing the chances of engagement and conversions.
Action step
Refine your targeting by reducing the size of your audience based on age, location, or interests. Focus on those who are most likely to convert and exclude broad or irrelevant groups.
Improve Ad Copy and Creative
Tweak your ad headlines, images, and calls to action (CTA) for better performance
Small changes to your ad content can make a big difference in performance. By testing different versions of your copy and creative, you can identify what resonates best with your audience.
Learn how small changes in wording or visuals can significantly reduce your CPC and improve conversion rates
Review your current ad performance: Check which ads are generating the most clicks and conversions. If certain ads are underperforming, it could be due to the wording or visuals used.
Experiment with headlines: Try different headlines to see what grabs attention. Test whether a bold statement, question, or more casual tone performs better.
Update visuals: Change the images or videos used in your ads. Sometimes, a fresh image or a more engaging video can significantly improve click-through rates.
Strengthen your CTA: Make sure your call to action is clear and compelling. Simple CTAs like “Shop Now” or “Get Started” tend to work best, but test different versions to see what works for your audience.
Action step
Run A/B tests on your ads by changing just one element at a time (e.g., the headline, image, or CTA) to see which version performs better. Focus on reducing your CPC and increasing conversions with each tweak.
Optimise for Time and Place
Schedule ads to run at times when your audience is most active, reducing unnecessary spending
Running your ads at the wrong time can lead to wasted spend, especially if your audience isn’t active during those hours. By scheduling your ads for peak engagement times, you’ll reduce waste and increase your chances of converting clicks into customers.
How to adjust bids for different devices or regions to focus on the most profitable segments
Analyse the timing of conversions: Use the data from your ad platform to see when your ads are getting the most engagement. Focus on when your audience is most active—this could be certain times of day or specific days of the week.
Set ad scheduling: On platforms like Facebook and Google Ads, you can set your ads to run only during these peak times. This ensures you’re spending your budget when your audience is more likely to engage.
Optimise for devices and regions: Review the performance of your ads across different devices (desktop, mobile) and regions. If mobile users are converting more than desktop users, you might want to increase your bids for mobile traffic and decrease them for desktop.
Action step
In your ad platform settings, set up ad scheduling to ensure your ads run at peak times. Adjust your bids to prioritise the devices or regions that are driving the best results.
By refining your targeting, tweaking your ad content, and optimising when and where your ads appear, you can significantly improve their performance without increasing your spend. The key is to make continuous adjustments based on data, allowing you to reduce costs while maximising results.
Conclusion: Monitor, Measure, and Optimise for Continuous Growth
Reducing your ad spend doesn’t mean reducing the impact of your advertising. By consistently monitoring your ad performance, measuring the results, and making smart, data-driven optimisations, you can cut costs while growing your customer base.
The key to success is in the process of continuous refinement. Paid ads aren’t a one-time setup – they require regular attention and adjustments to ensure they’re working efficiently and delivering the best possible return on investment (ROI).
Steps to Continue Your Ad Success
Monitor Regularly: Keep a close eye on your key metrics like cost per click (CPC), conversions, and spend. This will help you catch any potential issues before they cost you money.
Measure Results: Always compare how much you’re spending against the value you’re getting. Track your cost per conversion and cost per acquisition (CPA) to ensure you’re not overspending for new customers.
Optimise Continuously: Based on the data you gather, adjust your targeting, ad copy, and schedule. Regularly test new variations to see what delivers the best performance and scale up the most successful ads.
By following these steps and maintaining a habit of monitoring, measuring, and optimising, you’ll be able to maximise your advertising impact without increasing your spend. Small, consistent adjustments will lead to better ad performance, higher engagement, and, most importantly, sustainable customer growth over time.
In the world of paid ads, the key is adaptability. Keep refining your approach and you'll see greater returns on your investment as your strategy evolves with your business.