Wizard of Ads™

Cost of Exposure Calculator

How much should a home service company invest in brand advertising?

Your media rep says, “Spend more with me.” Google says, “Increase your daily budget.” The internet says, “Spend 5 to 7 percent of gross sales,” usually without explaining why.

This calculator gives you a more grounded answer. It connects three things most budgeting advice ignores: your projected sales, the profit built into each transaction, and the exposure value of your location.

The result is your cost of exposure: the amount you should invest in brand advertising to build share of mind, so that when someone needs what you sell, they think of you first.

This calculator is for relational advertising. Sales activation and other marketing investments are budgeted separately.

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Revenue for the coming year. You're budgeting to grow, not maintain.
Australian: use GST-exclusive revenue. GST is a pass-through, not your money.
%
%
Change either value. The other adjusts automatically.
Not sure of your margin? Calculate it from a typical job:
Enter what you charge and what it costs you for a typical full install: HVAC changeout, repipe, panel upgrade, etc.
$
$
Direct costs = equipment, parts, labor, permits
Gross Profit $4,000
Margin 47.1%
Markup 88.9%
Enter what you charge and what it costs you for a typical service call: repairs, diagnostics, tune-ups.
$
$
Direct costs = parts, labor, truck roll
Gross Profit $225
Margin 50.0%
Markup 100.0%
This formula requires markup, not margin. Most home service company owners know their margin but never their markup. They sound similar but produce very different numbers.
Margin is gross profit as a percentage of what the customer pays.
Markup is gross profit above cost, as a percentage of your direct costs.
Example: A Service Call
1
You charge the customer
$450
2
Your direct costs (parts, labor, truck roll)
$225
3
Gross profit on that call
$225
→
Margin = $225 ÷ $450 customer charge
50.0%
→
Markup = $225 ÷ $225 direct costs
100.0%
Same $225 profit, but 50% margin vs. 100% markup. The difference matters when calculating your cost of exposure.
Your Numbers
1
Annual Revenue (what customers pay)
2
Direct Costs (parts, labor, materials)
3
Gross Profit
→
Your Margin = Gross Profit ÷ Revenue
→
Your Markup = Gross Profit ÷ Direct Costs
Formula: Markup = Margin ÷ (1 − Margin)
A high-visibility location does some of your advertising for you. Home service companies usually need to advertise more than retail businesses because their location rarely creates walk-in awareness. Your advertising has to do the work a storefront would do for a retailer.
$

“A business with a good sign in a high-visibility location will need to advertise significantly less than a similar business in an affordable location.”

Roy H. Williams, The Wizard of Ads

Your Cost of Exposure

Minimum
$56,300
$4,692/mo
Maximum
$74,760
$6,230/mo
Your rent has consumed most or all of your exposure budget. For most home service companies, this is unusual. Your shop or warehouse does almost no advertising for you, which typically means more budget should go toward advertising, not less. Double-check your margin and projected revenue.
1a
10% of projected revenue
1b
12% of projected revenue
2
Margin → Markup
3a
3b
4a
4b

What Does This Budget Cover?

This formula calculates your cost of exposure: the investment needed to build share of mind so that when someone needs what you sell, they think of you first and feel best about you. It covers relational advertising. Sales activation and other marketing investments are budgeted separately.

✓ Included in This Budget

Radio: mass reach, frequency, share of mind
Television: broadcast and cable
Streaming / OTT: connected TV, pre-roll video
Billboards / OOH: outdoor and transit
Streaming Audio: Spotify, Pandora, podcasts
YouTube: pre-roll, in-stream, brand channels
Truck Wraps: mobile billboards, fleet branding
Social Media (brand-building): relational content on Meta

✗ Budgeted Separately

Google Ads / PPC: search demand capture
Local Service Ads: in-market lead capture
Retargeting / Remarketing: follow-up direct response
Promotional Meta Ads: offers, lead forms, call-now campaigns
SEO / Content: organic search optimization
Website: design, hosting, maintenance
Email / SMS Promotions: direct-response campaigns

Note: Rent is already factored into the formula as location-based exposure. This calculator covers media spend only. Consulting and strategy fees are separate.

Your Total Marketing Investment

Relational builds share of mind with the whole market. Sales Activation captures the smaller percentage already in the market today. Most potential customers are not buying today, but they will eventually. That is why more of the budget goes to relational: so they think of you when that day comes.
Minimum
Relational (60%)
Sales Activation (40%)
Total
Maximum
Relational (60%)
Sales Activation (40%)
Total

Why 60/40? Research by Les Binet and Peter Field found that around 60% relational and 40% sales activation is a strong starting point for long-term growth. For longer purchase cycles, the relational share can be even higher because customers spend far more time out of the market than in it. Your job is to be the name they remember when that day arrives.

Total Marketing Investment Breakdown

How your total investment is allocated

60% Relational / 40% Sales Activation
60/40 is a balanced long-term growth split.
Minimum
Maximum

Decision Time

Now you have a proven framework for your advertising and marketing investment. This is still a guide, not a command. The real decision is yours: advertise aggressively and aim to lead the market, or play it safer and grow more slowly.

Calculator Concept and Formula: Roy H. Williams, the Wizard of Ads.
Calculator App Design: Craig Arthur, Wizard of Ads, Australia.

Craig Arthur

Wizard of Ads Australia

Call +61 0417780882 or Send Me An Email