How to determine your budget for online advertising

To determine your online advertising budget, your first step is to determine what you can afford to pay for each new name you add to your list.

To determine the value of new names, divide annual online revenues by the number of subscribers. Example: If your 20,000 online subscribers account for $300,000 in annual sales, your subscriber value is $15 per name per year.

List-building campaigns should ideally pay back their cost within 6 months or sooner. Therefore, if your names are worth $15 per year each, you can afford to spend up to $7.50 per subscriber to acquire new names.