Prospecting vs retargeting: splitting the ad budget

Key takeaways

A prospecting vs retargeting budget split for a small business usually gives 80–90% to prospecting, reaching new people, and 10–20% to retargeting people who visited your website or engaged with you. Retargeting is cheap per result but limited by how many warm people exist, so it cannot absorb much spend.

• 80–90% of ad spend to prospecting new audiences.
• 10–20% to retargeting website visitors and engagers.
• Retargeting is capped by your warm audience size.
• Without prospecting, retargeting audiences shrink to nothing.

What is the difference between prospecting and retargeting?

Prospecting shows ads to people who have not interacted with you, chosen by location, interests or similarity to your customers. Retargeting shows ads to people who already have, such as website visitors, video viewers and page followers. Prospecting fills the funnel; retargeting helps people who are already considering you to decide.

• Social media budget for a UK small business
• Cold, warm and hot audiences on social media explained

Why is retargeting capped?

A small business website might have a few thousand visitors a month. Once your ads reach most of them several times, extra retargeting spend just repeats the message to the same people. Retargeting results look excellent partly because these people were already interested.

• Social media retargeting: win back followers who nearly bought

What does the split look like in pounds?

Illustrative example on £600 a month: £510 prospecting and £90 retargeting. For a site with very little traffic, retargeting may only usefully absorb £30–£50 a month. For a busy online shop it can be more. Let the warm audience size, not a fixed ratio, set the ceiling.

When should retargeting get a bigger share?

When you have a large, active warm audience: busy websites, big email lists, popular video content or long buying cycles where people visit several times before enquiring. High-value services with weeks of consideration often justify more retargeting to keep proof in front of people.

• How much to spend on retargeting ads

What does this look like in practice?

A pattern we see: an account runs mostly retargeting because it shows the best numbers, and over months the warm audience shrinks and results fade. Moving most of the budget back to prospecting usually refills the audience and steadies results within weeks.

• See client work
• Social Media Marketing for UK businesses

Ad split checklist

• Install the pixel so you can build warm audiences.
• Give 80–90% of ad spend to prospecting.
• Size retargeting by your warm audience, not a ratio.
• Exclude recent buyers from both where sensible.
• Check weekly frequency on retargeting ads.

• How much of a social budget should go on video?
• A new competitor opened: should you spend more on social?

Next step

Check the size of your website visitor and engagement audiences in Ads Manager. Set retargeting spend so each person sees your ad a few times a week, not daily.