The Budget Conversation Nobody Has
"What's your monthly budget?"
Every agency asks this. Most clients answer with a number they've inherited, guessed, or calculated based on what they can afford rather than what makes sense.
£10k because that's what the previous agency spent.
£25k because that's 10% of revenue.
£50k because a competitor spends that.
None of these are strategy. They're just numbers.
The questions nobody asks:
- At what CPA does your unit economics break?
- How much profitable demand actually exists?
- Where's the efficiency ceiling on your current spend?
- What's the marginal return on the last pound spent?
- Is more budget the answer, or is better allocation?
The budget trap:
Most brands are either under-spending profitably or over-spending unprofitably. Very few are at the optimal point.
Under-spending looks like: Amazing ROAS. Consistent performance. But leaving money on the table because there's more demand you're not capturing.
Over-spending looks like: "We need scale." Increasing budgets. ROAS holding steady. But marginal spend is losing money because you're past the efficiency point.
What the right budget conversation sounds like:
"Based on your margins, you can afford a £28 CPA. At current efficiency, that supports £35k/month in spend. Beyond that, marginal returns decline below profitable threshold."
"You're spending £60k but only £40k is hitting target efficiency. The other £20k is buying volume at negative contribution. Either cut it or accept the loss."
"You're spending £15k and hitting 6x ROAS. The data suggests you could scale to £25k and maintain 4x ROAS. That's more absolute profit despite lower efficiency."
Why agencies don't have this conversation:
If they charge percentage of spend: less budget = less fee.
If they charge flat rate: recommending cuts creates uncomfortable conversations.
If they want to grow: more budget looks like more success.
We have the conversation because it's the right one. Budget should follow strategy, not dictate it.