#237 How to Spend Your Marketing Budget: $100K vs $500K vs $1M

I'll see marketing plans and it'll be like, I've got five grand set aside for like bus stops. I've got ten grand set aside for radio. And I'm like, this doesn't make a lot of sense to me.

That's white noise. That's not strategic. You've got to be strategic.

I think traditional is probably going to go through a little bit of a renaissance here.

Hundred percent it is. When I talk traditional, I'm talking scale. When when your LSA isn't working, that's the bottom of the funnel. So the best way to combat that is to put a shit ton of people back in the top of the funnel.

Yeah, yeah.

Filter it down. They're forgetting the basics of marketing. How can I reach the most people for the least amount of money? Yeah, that's still TV.

How would you spend a million bucks? What would you do? The biggest thing.

I will warn you with traditional is.

Welcome back to Owned and Operated. I'm your host, John Wilson. I run a $30 million home service company in Ohio, and I also run a podcast teaching other people how to build their home service company and documenting my journey along the way. Today we have Tony from Wanamaker on the show again. Welcome, Tony.

Thanks. Thanks for having me.

This will be fun.

Yeah.

No, excited.

Good topic today. Yeah. Yeah. Today, today's going to be good.

So today what we're going to be talking about is we're going to be breaking down how marketing changes as your marketing budget grows. So what does marketing look like at $100,000 a year? What does marketing look like at half a million a year? And what does marketing look like at a million a year of marketing budget, not revenue? So I don't think we've, uh, I don't think we've ever done this topic before, but it should be pretty interesting.

Yeah, no, a lot of ways to, uh, to dive into it and kind of get in the nitty-gritty. So yeah, let's see how it goes.

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You wanna start small or big?

Let's start small. Let's work our way up.

All right, $100,000. A year marketing budget. What are we gonna do?

What do we do? You want, you want me to lead off here?

I'm, I'm curious. All right. Yeah. I'm curious what you think.

Again, so we're, we're a full-service agency. We really specialize in traditional, but we, we handle, um, you know, a lot of clients with their, with their digital as well, focused on lead gen primarily with home services. So for $100K, uh, A, it depends a little bit on, on the market size so that it's, it's a little variable, but we'll say if you're in a mid, small to mid-market, What's population? You know, population 2 million or less, I'd say. Like Cleveland's probably like, you're approaching a larger market.

You're probably— Cleveland's top 50 market, 3.5 million, totally larger.

Yeah, you're—

I wanna say like 9, the TVDMA, which is your TV market rank, is like 18 or 19, I wanna say.

Yeah, yeah.

Cleveland.

Yeah, it's big.

So if your market like 25 or lower, 100K, you're starting to eclipse that threshold where you're able to leverage some sort of scale media in opposed to, I mean, you've probably now outgrown strictly lead ads. You're probably outgrowing some of the more entry-level stuff with social, and you're probably wanting a little bit more consistent lead flow and growing the brand. So at $100K, I allocate the overall budget roughly the same no matter the size.

Okay.

There's a little discrep adjusting there, but I'd say, and I don't know how granular you want to go, if you want to talk grassroots door-knocking campaigns and stuff too.

Yeah, all of it.

I'd say 10% Just about everybody, 10% is usually on misc. Now, that's the one that probably changes when you get to a million. You don't spend $100,000 on random t-shirts at softball fields.

Yeah.

But you're probably at $100K, there's probably 10 grand of just random marketing umbrella things, your local teams, things like that.

Yep.

I'd say probably 50 to 60% is your digital. That's all-inclusive. That can go up and down depending on the The market size. So you're probably $50K or $60K. And at $100K, so what's that leave us?

So we've got like $30K, $40K to play with.

You have a little bit of traditional scale media that I would use with that, but—

So it's like $3,000 a month, $4,000 a month.

$3,000, I wouldn't even go a month. I would be, you have at that level, you can do traditional media, particularly I love broadcast TV, as you know.

Yep.

But you gotta be on point. So I'm looking at, see, I'm pulling up Google Trends, I'm pulling up previous sales, I'm looking at seasonality big time. Yeah, we're not going to be advertising in a dead month because you're not going to eat up all the budget.

Well, yeah, this— okay, this makes sense.

So instead of you thinking $3,000 a month, it'd be like $15,000. Is it $15,000 spring, spring, fall? Yeah, yeah, $15,000, $15,000.

Okay, I, I think I like that.

And you can be even more creative. I mean, again, we talked about it, video is key because you can answer why me, why now, uh, how can I afford you. That's king. But even more important is at that level is to just reach a shit ton of people. So yeah, even if it's a 5-second billboard, just company name tagline in local newscasts or in primetime or in sports, you can definitely attain that no matter what the market is with, you know, $30K or so. And then on the digital side, biggest mistake I see people do on the digital side, don't stretch it too thin. I mean, cover your ass on the things that are important. Get your SEO in line.

I see this all the time.

Get your SEO in line, get your PPC in line.

Yeah.

Get your LSA in line. You do not need to be on social and YouTube and OTT and everything right at once.

Yeah.

Get PPC, SEO, Google My Business, LSA. That is your safety net. That's how people are going to— even everything else you're doing is pushing them there.

Yep.

Be prepared to catch them. And then with that 30%, 30 grand discretionary, Do as creative as you can. Have somebody in your corner that can stretch it as far as it could possibly go and try to push as many people to that safety net as you can. So that's my $100K take.

Agree, disagree? I think that the way you're dividing up the campaigns into seasons, that I'm moving more towards agreement than I would've been because to me at $100K, I totally agree with how you ended it.

You don't want to be white noise.

Yeah, you do.

Yeah, you don't want to be— don't want to be white noise. And I think the, the game at small bud— the game at any budget, but the game at small budget especially is you don't really have the money to experiment. Like you said, 10% misc, but like, just like, that's 10%, you know, that's a lot. Like you just don't have the money to like find out. So I'm always a big fan of like, how do we get the maximum output? Now, if we're dividing it up by season, it's $15,000 per campaign. That feels pretty good. Like I could do it because that might be only 60 days. Yeah, you could run at that hard.

If you're in a smaller market, I always say if I had to start a company tomorrow and you're not shit out of luck if you're in a big market, but everything in a smaller market costs about the same as a big market. But the entry level, you're not reaching as many people. Yes, the pool is smaller, but the entry level for everything you're doing marketing-wise is significantly, significantly lower. The other warning shot I'll say, especially at that level, With your traditional types, it's big with radio. It's big with TV now, especially in an odd year where there's no political money. These stations are coming out and they're saying, "Here's the deal of all deals: 12 months at $1,500 a month, $2,000 a month." That's white noise. That's not strategic. You got to be strategic.

So like seasonality, time, season.

Don't run seven days a week. Sunday, Monday, Tuesday—your high call volume days where Angie's List built her business running weekend morning news to. grab leads and sell them back to you guys. So Sunday morning news, Monday, Tuesday, high call volume days, retail and everything else, entertainment will be your back half that no one wants to call a plumber on a Friday night. Yeah. So very, very strategic. So instead of $30,000 over 52 weeks, you know, it's $30,000 over, you know, 8. Then you drill it down even further. And how many days out of that 8 are you even on?

No, that makes a ton of sense. That makes a ton of sense to me. Yeah. I think the game early on is like, how do we centralize to the least amount of sources so we don't dilute. Like, like that makes sense.

Attribution. Yeah. You want to know what's working. So if I'm only on Sunday, Monday, Tuesday, 8 weeks a year and I see spikes. Yeah. Hey, I might put a little more there at work.

Yeah.

You know?

Yeah, I see. I'll see marketing plans from like companies with around this budget size and it'll be like, I've got $5,000 set aside for like bus stops. I've got $10,000 set aside for radio. I've got— and I'm like, this doesn't make a lot of sense to me.

And, you know, I'm an advertising agency, so I get put in this hole a lot. There's a lot of shady agencies out there that don't want to be held to attribution and ROI. So what do they do? Spray and pray. Hey, you're everywhere. So everything coming in is my, is my success story. No, um, you're everything. If even if it's working, it could work better if you dial it in with some strategy.

100%. Yep. Cool. That was a good one. All right. Half a million. So that's like a $5 million business, probably, maybe a little bit bigger.

Yeah.

'Cause a lot of companies are like 6 to 7, like 6 to 10%. So like, yeah.

And these are good benchmarks 'cause this is kind of what I see. So I see the natural home service, I see plateaus. So you got like your 1 to 2, then they plateau out until they change something. Then you got your 3 to 5 that people kind of plateau in.

Yep.

Then you have your 5, then you go off, you go viral in home service growth. But at a half million, now you're starting to become a dominant brand. That 3 to 5 range, you are starting to stick up a flag in, in, in really any market size at this point. Maybe not in New York City and LA, but everything else you can afford traditional, especially your, your, your news stations.

Yeah.

The allocation, I keep it pretty much the same, 50 to 60% on your digital side. Now you probably have a little bit more there to, uh, eat up more of the LSA share. You might be able to branch out and do some creative things on the social side. I'm not a huge social media guy. I think that's a very entry-level digital tactic because you can get in at a couple hundred bucks a month. You'll get leads. They're going to be shit, but it gives you something. Once you start to spend significant money on inbound coming leads, you've outgrown that. You want to shift towards quality leads. Yeah. And conversions and better KPIs. So, um, I'd heavy up all of the things we talked about— PPC, SEO, GMB, LSA. Um, maybe start looking a little bit more at lead quality. So maybe I have a little digital budget that I can carve out for streaming video in zip codes that I want to start targeting. You can start adding in a little bit more sophisticated approach to be pickier with your leads. And then on the traditional side, Same 30%-ish. So I'm not a math major, but you're getting up, you know, what's that, a little over, a little over $100,000, somewhere in that range. You're starting to be more of a 52-week brand depending on the market size. Again, if you're in a top 10 market, you might still have to do a seasonality type of approach, play with spot lengths, things of that nature.

Yeah.

But most markets you could be that 52. Again, 1% of the market's in the market at any time. So the faster you can get to that consistent presence, that's where you can really start to build that, that brand credibility. And you'll see referrals come up, you're seeing your branded searches start to spike. So it starts to snowball at that point. So not a whole lot, I'd say, just so you can add a little bit more sophisticated approach, some more high-level tactics on the digital side, and more of a consistent 52-week feel on the Yeah, I think all that makes sense.

I think it's sort of the same thing, just don't dilute, which I think people naturally tend to do. The bigger the budget, the more they're like, well, I think I should be more places. But half a million dollars is still— you can dilute too much. I saw a P&L, it was a business we were thinking about buying, this was 2 years ago, and they were spending— it was a $5 million business spending full 10%, so $500,000, which that alone is already kind of uncommon. Not many people actually spend 10%.

We see 6 to 8 is usually the range we kind of see.

100%. Most people are 6 to 8. That was already a little bit of a red flag. I was like, oh, 10%, that's odd.

Get after it.

I just don't see that very much. So we dig into it and I bring up the story a lot, but 150 of it was billboards. Are you still running your referral program with spreadsheets and Venmo? Well, Volca is going to bring your referrals into the 21st century. It's a referral program on steroids. It's fully automated with ServiceTitan integration, SMS functionality, and built-in tracking and payments. No more writing checks or guessing what's working. Just clean, consistent growth. Owned and Operated listeners get 10% off of all contracts. Just book time with Don or the team through the custom link in the description. Volca, automated referral programs for home service companies. And then—

You got a feel on this.

Oh yeah, I was like, holy shit, Tony's gonna be pissed. But yeah, that was crazy. And then, uh, you know, some, some was, uh, a little bit of TV. It was like they sort of did, they sort of did everything. And I, I still think at, um, like $500,000 is $40 grand a month. Yeah, you know, so we're talking about money, but we're not talking about like— that's still not that far to go. Like if you've got $8,000 to $10,000 on conventional, you have $30,000 to do leads. And like Google will take $100,000 a market. So you still have, you're like barely scratching the surface on what Google can give you still.

And there are nuances, especially by market, by company. So at $500,000, now you're enough places where I've set, you know, kind of a benchmark allocation. But now you're starting to get KPIs. So now, hey, maybe, You know, in my market, I'm super strong with TV and TV's driving it. So maybe I'm not spending as much on PPC as maybe my benchmark would tell me to. So you're starting to get a little sophisticated there. Again, with, um, so you have in this scenario, you know, 8 to 12, depending on how you structure it with that 30% a month on the traditional side. Yeah. Big proponent of broadcast TV. Stay away from cable. Radio, I'd only do it if I'm pushing recruitment. Billboards, I'm only buying select high-traffic billboards in zip codes and geo areas that I really want to target. I'm not doing a mass billboard campaign. So to your point, don't dilute it, especially with tactics that aren't going to move the needle nearly as much as others. So yeah, own TV, build that brand strategically. You could sprinkle in some billboards, but, um, and maybe some print in there as well. Some, some localized print. Um, not a newspaper fan, but, you know, I have clients that rave about those little, you know, the home mags, the Clippers. Yeah. Yeah. Old ladies, you know, hold them up. Yeah.

You know, so We've done okay with it. ROI was like a 2x.

Yeah.

But I also think messaging wasn't right. So could it have been a 4x? Could it have been a 5x? Messaging is just so important.

Print is tough. I mean, a lot of people, you got to have your— that's where it even ties back to the brand credibility. People kind of got to know you. They're not going to see you and then Google you off a print ad for the most part. Yeah. But will it hang around especially for You know, HVAC and plumbing, could it be on a counter for months? And now my pipe broke. And so there's some, some positives to it.

Yeah. Yeah. I read an article last week about, you know, as the more challenging leads get in 2025, the more people are looking for like alternatives. Like how, how else do we drive leads if LSA doesn't work or if it doesn't work as much as I need it to? Like, what else are my options? So this one guy He reverted his spend from a 70/30 digital/traditional to 70 traditional, 30 digital.

I've seen it.

And most of traditional went to direct mail, and supposedly it worked according to this article. In my mind, I'm like, I want to see the mail. But it was really interesting.

Direct mail, it can work. From a traditional focus, I have a hard time paying 40, 50 cents per person. Yeah, that's an insane amount of money. You break that down, you can't—

you can pay less, but it's like inside these bulk packs.

I mean, I throw those right in the trash. Um, yeah, so that's when I talk traditional, I'm talking scale. When your LSA isn't working, that's the bottom of the funnel. So the best way to combat that is to put a shit ton of people back in the top of the funnel. Yeah, yeah. And filter it down. Yeah. So that's probably what he's doing, just wrong tactic to it. Yeah. Um, but I don't hate the— hate the thought.

Yeah, no, I think, uh, I think traditional is probably going to go through a little bit of a renaissance here.

100% it is. Yeah. I mean, we're seeing people are coming to us raising their hands, you know, in these buckets, this $500K bucket. I was doing this 5 years ago. It's not working as good. Yeah. Yeah. And they're forgetting the basics of marketing. How can I reach the most people for the least amount of money? Yeah. At the end of the day. Yeah. That's still TV and a couple other strategic traditional pieces. Yeah. Um, but yeah.

Cool. Let's do the fun one. Let's do the big one. Million dollars.

Just throw it in the air.

How would you spend a million bucks?

Uh, what would you do? A million Lambos and that's it. I'm wrapping Lambos and just driving around.

Yeah, yeah, let's go. Uh, a million bucks.

Actually, this might be though, I know I was gonna say pretty much the same allocation. If I was going to change my allocation totality, so A, now I'm cranking down that 10% on the random shit. I'm taking that down. Yes. I'm not spending $100 grand on little softball teams. Um, but I would think about possibly upping, um, the traditional side. 'Cause at, at, uh, a million dollars you are a brand. So now you're not competing with Chuck in a Truck, you're competing with regionals, you're competing with Angie herself.

Yeah.

So at that point, it's about brand. It's about being branded, branded search. So, and, and you probably are coming close to maxing out LSA and some of that. You can't probably even add much.

You're pretty, yeah, you're pretty close. Like, uh, it depends on the market, but like LSA, uh, will max at like 50 to 100 a month. Like if you're a small market, much less.

Yeah. Yep.

Uh, even PPC maxes, like PPC, it's the first 80% of searches are affordable. The last 20, are not affordable at all. So if you're in front of the first 80, like, you're good.

Yeah. So I'm focused on essentially making sure I'm good on the, on the, the back framework. The biggest thing, because when people get here, they keep the allocation about the same and they start dishing it out everywhere, especially on the digital side. Yeah. I, again, not a big fan of, of social, not a big fan of display advertising, even retargeting for the most part. I don't like retargeting, especially with services. Yeah. I mean, who wants ads because my pipe broke 3 months ago, I still want to see your ad.

Yeah.

So I am focused on that scale. Maybe I start sprinkling in a couple more billboards. I am cranked up on TV. I am doing a lot of streaming TV, especially quality streaming TV that's going up with quality programming. We call it FEP, full episodes, full episode programs. So that's programming 22 minutes or longer because you want that engagement. You want your name to be That's the goal. And then the cost per lead and ROI and ROAS all follows after that. Now, the biggest thing I will warn you with traditional is, I guess it's kind of a little bit off topic, but people want to hold the cost per lead to a digital cost per lead. It's a different methodology. You have to look at that halo effect and how it trickles down. So if you're rolling your eyes, $1 million, I'm going to spend, you know what, $300,000 on traditional, you're crazy.

Yeah.

Telling you, don't follow it through. Go deeper because it will change the game.

Yeah, well, I think to summarize that, this is CAC to LTV, which is seemingly not a calculation that home service like walks through a lot. But CAC is customer acquisition costs versus lifetime value of that customer. Like it's the guiding metric for any advertising is like, how much did it cost me and how much over the lifetime of that customer will I receive in revenue? So lifetime could be 3 years, could be 5 years. It's not just the first appointment.

We spend an amazing amount of time trying to correlate everything traditional to ROI.

Yeah.

But it doesn't matter how good you are, you are never going to be able to fully capture everything it's doing.

Yeah.

So that's the biggest thing. And then the, the other part of that is I'm seeing, um, The conversion rate, anything that I can tie back to TV.

Yeah.

Or traditional.

Yep.

If you follow it through all the way to the sale, lead to sale should be over 40%. I mean, I'm seeing like 43% on average.

That makes sense. I mean, they sought you out specifically.

Yeah, they saw— they want to work with me. I mean, a lot of companies are working that are coming.

You solved the why me, why now, can I afford you?

A lot of companies that are coming to us are saying, I can't— I'm converting, you know, lead to sit at 40%, not lead to sale. So I mean, that's a game changer when you start to think of Yeah, yeah. Quality lead. So yeah, um, that's the other part of it. But, but yeah, I hope that's helpful. So yeah, that's how I'd structure it. Yeah, I think, I think, uh, I thought we were gonna fight a little more. Are we gonna fight more on this?

We can, but, uh, no, I think, I think, uh, yeah, a million bucks, um, definitely you're more of a brand. Traditional should be a bigger thing. I think the only like caveat that I would add, uh, and I'm gonna say this with caution, at a million dollars, someone internally should be accountable for that budget. So there is an inside hire that comes in at $1 million.

Like a CMO?

No, like a marketing manager, marketing coordinator. Now, my caveat is like, what I am not saying is in-house your marketing. Like, I know companies with $5 million budgets that have a marketing manager and a coordinator and they manage agencies. Like, we have agencies. And a big mistake that I see is really early on, someone's like, oh man, I don't want to pay an agency to do this thing. I'm just going to go do it. And it's like, your budget's $200,000. What are you talking about? Literally, what are you talking about? And we have agencies. So I think just—

And a lot of times you don't pay them. For traditional media, we're on points. There's no out-of-pocket. You buy it or I buy it. It's the same cost to you.

Yeah.

We're getting a discount. So digital's a little different 'cause you have management fees and service around. But on the traditional side, it's not a lot of cost to you. So to your point, yes. But when you're spending that kind of money and you're using agencies, you almost need like a babysitter. To your point, you need somebody kind of keeping a pulse on it. Like, is this kind of on point?

Well, you gotta keep the agencies accountable.

Yes.

Yeah, yeah. And I'm giving that big caveat because I think people get like really worked up about in-housing their marketing, and which I don't think happens until like millions of dollars of spend.

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The only people that I've seen successfully in-house their marketing fully, were huge. They poached people like me from other agencies. They poached people in the business and brought them in. They didn't train up sales. Well, there's no way to.

Because the thing people don't— and I'm saying this specifically at a million, is every single discipline of marketing is a specialty. Media's a specialty. PPC's a specialty. Paid social's a specialty. And a generalist to do that, Would do a horrible job.

I mean, that's why we lead with we're traditional, specifically TV. Listen, will we do digital? We do a lot of digital too, but we know that sometimes if you're happy with your digital guy, he's probably not versed to do TV. And I'm probably not as good if you're happy, or maybe I am, but why chance it and go that route? So Yeah, I mean, vet it to your point. And then the other part of bringing it in-house is, I mean, just from running a business, there's costs that, you know, you got health insurance, you got benefits, things like that. So is it worth taking on a team of, you know, 20, 30 people to execute everything? But yeah, so awesome. We didn't fight that much.

No, we didn't. No. And I think those are good benchmarks because $1 million to spend, I mean, that could be like $15 million business.

Yeah, yeah.

A million dollars is a lot of money.

Yeah. I mean, when you're that big, best way to think of it too is you got the biggest bullseye on your back in your market, probably. So when you are going a little bit more brand traditional-centric, that's your best defense. Yeah. Don't let them poach your clients by, you know, upping. You know, Angie spends— Angie and HomeAdvisor, I think, combined for like $4 or $5 million a month just in PPC. Yeah. So you're competing with them. You don't want a search that's coming to you to be siphoned off at the bottom of the funnel. Yeah, because it's not branded enough.

So yeah, yeah, makes total sense. Yep. Awesome. Awesome, man. Cool. People want to get a hold of you. How can they find you?

Wantmore-leads.com is our website. Fill out a form, fill our numbers on there. I'm Tony. We're a smaller shop. So if you do it, I'll see it directly. Awesome. And happy to have a conversation, see where it goes.

Cool. Appreciate the riff.

Awesome. Thanks, man.

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