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How should I split my budget between prospecting and retargeting?

A good rule of thumb when it comes to splitting your paid social budget between prospecting and retargeting is 80/20 – with no more than 60/40 split, in favour of prospecting. A good starting point is to look at the size of your retargeting pool.

You want to continuously be reaching new users to grow the pool of people who are exposed to your brand. Whilst the tendency is to hyper-focus on retargeting as it’ll naturally drive the best results, this is a short-sighted view, especially if you’re not actively targeting new customers or running activity further up the funnel. Eventually the retargeting pool will dry up. You should view the two holistically to make sure it’s costing in and is profitable for your business.

Watchout: Spending too much on a small retargeting pool can lead to your ad frequency being through the roof, and all you’re doing is paying for the same people to view your advert. This will lead to a drop in click-through-rate and inflate your cost-per-clicks/cost-per-action and ultimately cost you more money.

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