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The Ad Spend Deep Dive

  • Ryan Tungseth
  • Oct 23
  • 4 min read

Stop Guessing. Start Tracking. Make Every Ad Dollar Count.


Why This Matters

Most small business owners don’t actually have a marketing problem — they have a measurement problem.


They boost a post, run a few Google ads, maybe even try Meta… and then stop because “it didn’t work.”


But what does “didn’t work” really mean?

Too expensive?

Too few clicks?

No calls?

If you don’t know your numbers, you can’t improve your numbers.


This post breaks down how to track, benchmark, and manage your ad spend — using the same process we use for clients, plus AI prompts to make it simple.


Step 1: Know What You’re Actually Paying For

These are the only numbers that matter for 99% of small businesses running ads:

Metric

What It Means

Why It Matters

CPC (Cost Per Click)

How much you pay for each click.

High CPC = your targeting or creative may be off.

CTR (Click-Through Rate)

% of people who see your ad and click.

Shows if your message is resonating.

CPL (Cost Per Lead)

How much you pay per inquiry or form fill.

The key number for service-based businesses.

CPA (Cost Per Acquisition)

Cost to actually close a sale or job.

Real ROI metric.

ROAS (Return on Ad Spend)

Revenue ÷ Ad Spend.

The “is it worth it?” number.

Frequency (Meta)

Average # of times each person sees your ad.

Too high = ad fatigue. Too low = no recognition.

Know these six metrics, and you can manage ads with confidence.


Step 2: How to Set Real Targets (With Real Math)

Let’s use a real remodel example — because this is where most small-town service businesses get tripped up.


Example: Local Remodeling Company

  • Average project value: $15,000

  • Average gross profit: $7,000 (after materials and labor)

  • Target ad spend: 3–5% of gross profit per job

  • Close rate: 10% (1 job booked for every 10 qualified leads)


Here’s the math:

1️⃣ Budget per booked job:3% = $210 • 5% = $350

2️⃣ Leads needed per job:10 leads → 1 booked job

3️⃣ Target Cost Per Lead (CPL):$210 ÷ 10 = $21/lead (3%)$350 ÷ 10 = $35/lead (5%)


👉 Formula: Max CPL = Gross Profit × Ad % × Close Rate


Example: $7,000 × 0.05 × 0.10 = $35 CPL

If you close more often (say, 20%), your CPL target doubles.If your jobs are more profitable, your budget can expand.


Step 3: Translate That to CPC (Cost Per Click)

Now connect it to your website’s conversion rate — how well it turns clicks into leads.

If your site converts 15% of visitors into leads:


CPC = CPL × Lead Conversion Rate$35 × 0.15 = $5.25 CPC


That means you can afford up to $5.25 per click.If your CPC is higher — or your page converts worse than 10–15% — you’ll burn through your budget before landing good leads.


Step 4: Track Like a Pro

You don’t need fancy dashboards to manage ads effectively. Just a little discipline.


✅ UTM Links (Google & Meta)Use this format for all campaigns:?utm_source=google&utm_medium=cpc&utm_campaign=kitchen_remodel&utm_content=ad1


✅ Weekly Review

  • CPC

  • CTR

  • Frequency (Meta)

  • CPL by campaign


✅ Monthly Review

  • Booked jobs per source

  • Close rate (leads → sales)

  • ROAS (Revenue ÷ Ad Spend)


✅ Simple Tracking Sheet

Date

Platform

Campaign

Spend

Clicks

Leads

CPC

CPL

Notes


If your CPL creeps above your target or your close rate dips, you’ll know exactly where to look.


Step 5: Adjust Intelligently (Not Emotionally)

When results dip, don’t just panic and hit “pause.”


Ask yourself:

1️⃣ Are people clicking? (Check CTR)

2️⃣ Are those clicks converting? (Check CPL + landing page)

3️⃣ Are you getting enough reach? (Check Frequency)

4️⃣ Is your close rate holding steady?


Then adjust one variable at a time:

  • Bad CTR → Fix creative or offer.

  • Bad CPL → Improve page or form.

  • Bad close rate → Tune your follow-up.


Step 6: Let AI Handle the Heavy Lifting

You don’t have to spend hours in spreadsheets.Use these ready-to-run AI prompts to automate your analysis.


Prompt 1: Calculate Your Max CPL and CPC

Act as a marketing analyst. My average job is worth $15,000, with a gross profit of $7,000. I want to spend 3–5% of my profit on ads and close 10% of leads. My website converts 15% of clicks into leads. Calculate my target CPL and CPC at 3%, 4%, and 5% ad spend. Then summarize in a table.

Prompt 2: Analyze Last Week’s Ads

Here’s my ad report for the past week. Summarize CPC, CTR, CPL, and ROAS by campaign. Identify which are above my Max CPL and recommend what to pause, adjust, or scale.

Prompt 3: Build a Simple Ad Tracking Sheet

Create a Google Sheets template to track weekly ad performance (Google + Meta). Include spend, clicks, leads, CPC, CPL, and notes. Add conditional formatting to highlight any CPL over $35.

Prompt 4: Improve My Ad Creative

Here’s my ad copy and image description. Suggest three alternate hooks and visuals that could improve CTR for homeowners in [your city]. Keep the tone friendly, local, and trustworthy.

Prompt 5: Predictive Budget Plan

Using these results, project what monthly spend I’d need to hit [X leads or X jobs] while keeping CPL under $35. Show three spend levels: conservative, realistic, and aggressive.

Final Word

If you treat ad spend like a guessing game, you’ll always feel like you’re losing.

But when you track, benchmark, and adjust with intention — and let AI crunch the numbers — you’ll finally know what’s working and what’s not.


That’s how you stop wasting ad dollars and start building momentum.


Bonus Resource

Watch: 6 Ways AI Turned One Podcast Into a Content MachineWe show exactly how we turn one piece of content into ads, emails, and social posts that actually work.👉 Watch on YouTube


Want More Like This?

Subscribe to AI-Fueled Growth for practical ways to use AI to grow your business — without jargon, hype, or wasted spend.


 
 
 

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