Solved: Determining Initial Daily Ad Budget and Platform Focus for Online Luxury Retail

Hi there,

Thanks for reachin out, happy to give you some initial thoughts and guidance based on what you've shared about your luxury online retail store.

We'll need to look at your budget approach...

Right, dealin with luxury retail means you're sellin high-ticket items alongside lower-priced stuff. This makes the budget question abit more complex than say, selling £20 t-shirts all day. You're askin about a minimum daily budget to start, and honestly, it's a bit like askin 'how long is a piece of string?'.

The true minimum budget reely depends on your average order value (AOV) for the products you hope to sell via ads and what your target Cost Per Acquisition (CPA) is. If you're sellin £10k dresses, your CPA can be much higher than if you're just sellin the £20 socks, and you'd still be profitable. The ad platforms optimise for conversions, but they need enough data to figure out who is most likely to buy a high-value item versus a low-value one. That data costs money to acquire.

You mentioned testin 16+ creatives weekly. That's quite a lot to cycle through, especially when you're just starting out. To get reliable data on which creatives are workin and which aren't, you need enough budget to give each one a fair shot. If you've got 16+ creatives and say only £50 a day budget, each creative gets less than £3 a day spend. That won't be enough to reach a statistically significant number of the right people, let alone generate enough conversion data (purchases or leads) to judge their performance properly.

Think about it this way: if your target CPA for a profitable sale is, say, £200 (maybe you're sellin a £1000 item and have a good margin), and you're testing 16 creatives, you'd ideally want enough budget per creative to see if it can generate a sale or two reasonably quickly. If it takes £300 spend per creative to see a sale (a £200 CPA plus some non-converting spend), you're lookin at £300 x 16+ creatives just to get initial performance reads. That adds up fast. You don't necessarily need to scale all 16 immediately, but you need enough budget to allow a good handful to spend enough to show you if they have potential.

I'd say you need enough daily/weekly budget to aim for a decent number of conversions (purchases probably, given it's retail) coming through consistently each week across the creatives you want to test properly. This gives the platform's algorythms somethin to optimise towards and gives you data to make judgement calls. For a business with your product range, testin viability could reely mean anything from £100 a day upwards, perhaps significantly more if you're pushing the higher ticket items and competition is high. It reely depends on the specific products you are promoting first and what a viable CPA looks like for those items.

It's always best to start with enough budget to learn quickly what works and what doesn't. Too little budget spread too thin means you just waste money without learnin much at all.

I'd say you should focus your platform choice...

You're asking if you should invest in just one platform or split your budget between Meta (Facebook/Instagram) and TikTok. Given your product range, especially the high-end luxury items, I would definately recommend starting with just one platform. Spliting budget too thin, especially when you're also testin a high number of creatives, is a recipe for poor results and not gettin any clear data.

For luxury goods, particularly those that are visually driven like dresses and apparel, Meta – and specifically Instagram – is usually the go-to platform. You have much more sophisticated targeting options available on Meta compared to TikTok, which is crucial for reachin the specific high-net-worth individuals or people with a genuine interest in luxury retail who can afford your higher-priced items. Instagram is also inherently a more visual platform, which is ideal for showcasin the quality, detail, and aesthetic of luxury goods. You can use high-quality image and video ads (Sponsored Content style, or maybe Carousel for multiple items) to reely highlight the appeal of your products, much like one campaign we ran for a luxury brand launch on Meta which achieved 10 million views. We've also seen strong ROAS (Return On Ad Spend) for other eCommerce clients on Meta, including campaigns for women's apparel which saw a 691% return and cleaning products with a 633% return. While these aren't luxury, they show Meta's power for visual products and generating returns.

TikTok, on the other hand, is a different beast. It's very trend-focused, often favouring quick, engaging, and sometimes less polished content. While it has a huge audience, reaching and converting a luxury buyer there requires a very specific strategy and creative approach that feels native to the platform. It might be hard to make a £10k dress appeal in a typical TikTok scroll unless you have a killer, very bespoke content strategy that reely understands the platform's unique culture. You might get views, but convertin those views into high-value sales is a different challenge.

Unless you have a substantial budget and a clear, unique plan for TikTok that aligns perfectly with luxury retail, focus on masterin Meta first. Get your campaigns profitable there, understand what targeting, creatives, and offers work best for your different product tiers, and build a solid base. Only once you're consistently seeing good returns and have spare budget should you even think about expandin to other platforms like TikTok or potentially Pinterest (which can also work well for visually-driven eCommerce and fashion). Starting strong on one platform gives you the best chance of success.

You probably should refine your creative testing...

Testin 16+ creatives out of the gate is ambitious, maybe overly so, especially alongside figuring out the right platform and initial budget. It sounds like you're planning to start with posts that have the best engagement and then invest more in those as ads. This can be a decent approach for findin initial creative angles that resonate, but organic engagement doesn't always translate directly into paid ad performance, especially for conversions like high-value purchases.

With paid ads, you need a structured approach to split testin. Instead of just promoting high-engagement posts, think about testin specific variables. What's the main hook? Is it the product itself? A specific feature? The feeling of luxury? The designer? Different ad copy angles? Different visual styles (studio shots vs lifestyle vs video)? Different calls to action?

Instead of just throwin 16+ different posts into the mix, try segmenting your tests. Maybe test 3-4 really different creative angles for one type of product or category first. Once you see which angle performs best (measured by click-through rate, landing page views, add to carts, and ultimately purchases, depending on your funnel setup), you can then create variations within that winning angle. For example, if a lifestyle video works best, test different versions of that video, different copy alongside it, or different audiences for that specific video.

Proper split testin within your campaigns is reely important for optimisin performance over time, as we've seen with many clients. It's not just about findin one winner, but continually testin and improvin. Try to focus your initial testing budget on a smaller number of well-structured tests that are designed to give you clear answers about what resonates with your target luxury audience and drives them towards a purchase, rather than just engagement.

Also, ensure your pixel and analytics are properly set up to track all the key conversion events – view content, add to cart, initiate checkout, and purchase. For high-value items, you might also want to track micro-conversions like scrolling past a certain point on the product page, spending a long time on the site, or viewing multiple product pages. This data is absolutely critical for the platform's algorithms to learn and optimise your campaigns effectively, especially when aiming for high-ticket sales where conversions are infrequent.

You'll need to ensure your offer and website are aligned...

While you didn't mention your website specifically, in luxury retail, the online store is your showroom. It has to convey trustworthiness, exclusivity, and quality instantly. Any friction or lack of polish can send potential high-value customers running. Make sure the website loads fast, is easy to navigate, the product photography is exceptional, and the descriptions are detailed and evocative.

For high-ticket items, unlike lower-priced goods or say, software trials where getting people in the door with a free offer works well, luxury buyers often need reassurance and a sense of personal connection. Do you have detailed sizing guides, return policies, customer service contact options clearly visible? Consider features like personal shopping appointments (even virtual), or loyalty programs that resonate with a luxury clientele. Sometimes, especially for the very high-end dresses, a direct 'Add to Cart' might feel too transactional. Maybe offer a 'Request More Information' or 'Book a Consultation' option for those items, leading to a more personal sales process, similar to how B2B sales often work where generating a lead for a sales call is the goal, not an immediate purchase.

Ensure your offers, even for the lower-priced items, feel premium and consistent with the luxury brand image. And make sure your site has trust signals like customer reviews (if you have them) or mentions in publications. As we found when critiquing an eCommerce site that wasn't converting well, a store that doesn't look trustworthy means people won't feel comfortable orderin, especially expensive items. Trust badges, reviews, clear contact info – all these help build confidence.

This is the main advice I have for you:

Tacklin paid advertising for luxury retail, especially with such a diverse price range and high-value items, can be quite complex. Getin the budget right, focusin your efforts on the platforms where your audience reely spends their time, and ensurin your creative and website are perfectly aligned with a luxury brand image are all critical pieces. It takes careful planning, execution, and ongoing optimisation to make it work profitably.

Sometimes, havin an experienced eye look over your specific situation can make a huge difference in gettin things set up correctly from the start or identifyin bottlenecks you might not spot. We've helped numerous clients in eCommerce and software navigate these challenges, improvin results by optimisin campaign structure, targeting, and creative strategy, sometimes leadin to significant ROAS improvements or reduced acquisition costs like the eCommerce examples I mentioned.

If you'd like to chat through your specific setup in more detail and get tailored guidance, we're happy to offer a free initial consultation. It often helps to walk through your account and strategy together to see where the biggest opportunities are.

Regards,

Team @ Lukas Holschuh