Pinterest ads. What should my budget be?

We hear that question a lot.

When it comes to money and advertising for your business you might be feeling nervous about how much to invest. How do you know if your investment will pay off? Here are some guidelines to figuring it out.

Part 1: Money

The best practice according to Pinterest, that gets the highest returns (and I have seen this with my clients too) is 3.5 x your average cost per acquisition.

So if you sold a $100 hat or piece of jewelry the math would look like this.

Assuming you have a 75% gross profit margin (meaning net sales minus cost of goods sold) or your gross margin is $75 dollars for every $100 sale.  The questions you have to ask yourself are:

1. On average how much does it cost you to make one sale to earn $75?
2. What would you be willing to invest to earn $75 gross dollars?

For the sake of this post let’s assume you’d spend $25 in Pinterest ads to earn $50 in sales. So you could get a 3:1 ROI.  (Of courses you’d rather spend $1.00 but given the level of competition almost every business faces common sense and your historical #s have to be applied.)

According to Pinterest your daily budget should be $25 x 3.5 = $87.50 per day or $2625 per month. 

With that level of spend you’ll create enough volume that the Pinterest algorithm will find you the right audience at the right time in their buying journey and it will learn how to “sell” your products to your best buying audience. 

At that spend you’d expect to make more than 1 sale per day obviously because you’d need to or you’d be going backwards. 

If your overall goal was a 3x ROI from Pinterest that means you’d be looking for:

$2625 x 3 = $7875 in new sales per month. 

This means you’d have to sell 78.7 products @ and average price of $100.

That is how Pinterest ads work.

Listen folks this part is very important. If you don’t invest enough you will not be set up for success. Whether you like it or not Pinterest has an algorithm and it needs to gather information about you so you will have more success in the long run. 

Thinking you will put in $10 a day and expect a 4 to 1 or 6 to 1 ROI is very likely not going to happen because you’ll never feed a big enough volume of data into Pinterest for it to learn how to sell your products to your best buyers at the right times.

Furthermore, if you sell seasonal goods like just for summer or Christmas then start your campaign early because it still takes 2 to 3 months to ramp up and you have to be mindful of when people are most likely to use your product.  If they need a fishing hat in July they are on line in May looking, planning, seeing what is out there. 

Pinterest users are planners so you need to start promoting to them at least one/two months before the season.  That is how you connect with Pinterest users in their buying journey; when they open to new brands and looking to discover new ideas.

Pinterest ads Part 2: Time

The other part of this best practice is that you will probably not see great results until toward the end of month 2 doing this type of campaign.  If other so called Pinterest experts are telling you that it will be sooner they are simply lying to you.

By the end of month 2 Pinterest will have learned enough about your products (your most popular products, new products, all products, etc) , prices, audience, and your competition to know how to sell your products.  I review those reports and after about 3-4 weeks if I see room for changes or improvements I also apply those to optimize your performance.

Key point: Pinterest’s algorithm needs very close to 21 days at least to just to learn your business. During this learning phase you are strongly advised NOT to make any changes because if you make even the smallest change to an ad the algorithm will get re-set back to zero and begin trying to learn your business all over again. During this time do not expect to make sales. Stay calm:) 

If you are impatient and keep making changes because you are not seeing the results you want after 3 days or 7 days you’ll forever frustrate the algorithm, it will never properly learn your business as it is designed to and you will forever under perform on Pinterest ads.  In the end you’ll quit, say it does work but that would not be entirely accurate because you failed to use the tool the way it was design to be used.

So the rule is plan smart, set realistic expectations and let Pinterest learn your business for 3 weeks and then if we see room for changes we will make them.  Notwithstanding if after 2 weeks we see a glaring issue of course we’d make a change to correct it. But them the system would start the learning all over again. If you can’t do that then don’t use Pinterest ads.

That is how it works. Those are Pinterest’s best practices. If you are not willing to work within those guidelines you will very likely fail to maximize the power of Pinterest ads.  Our advice is do it right or don’t do it because in the end you’ll likely be frustrated or even angry that you wasted money.

If after 2 or 3 months you do not make any sales then Pinterest ads are not for you.  So stop and save your money.

You have to use the tool correctly to get results; like you wouldn’t use a hammer to cut wood.  You’d use a saw right? 

Part 3: Organic

How does your organic effort complement and help the Pinterest ads to be more successful?

In a word; traffic. 

You need a very good organic effort to rank high on the Pinterest search engine and get traffic; the Pinterest ads algorithm needs that extra traffic to learn from in order to maximize Promoted Pins ROI.

Remember Pinterest is now a public company; for profit.  They need your Pinterest ad campaigns to be successful because they need you to spend more.  

They want you to make sales. 

It is in their best interest if you spend more but also make enough of an ROI that you keep spending.  

That way it is win/ win and good for both.  

If their algorithm or any of the strategies we use to optimize your Pinterest promoted pins campaign fails everyone loses; you and Pinterest.  Nobody wants that. 

So remember, Pinterest wants you to get a great ROI because they want to keep you as an advertising customer long term. So, if they say they have a best practice that will increase results it’s a good idea to follow them because they are trying to steer you towards getting a greater ROI so you spend more with them.

They realize you need an ROI to keep spending.

If you want more audience or sales connect with me to get some help with Pinterest ads/ Promoted Pins to compliment your organic efforts and together you can maximize the power of Pinterest.