The 70/20/10 ad budget rule is the simplest framework I know for splitting ad spend without either playing it too safe or gambling the whole budget on a hunch. It comes from big-brand media planning, but it works just as well for a plumber spending $2,000 a month as it does for a company spending millions. The idea is to put most of your money on what works while still leaving room to grow.
What the split actually means
You divide your ad budget into three buckets:
- 70% on what works. Your proven channels, campaigns, and keywords. The stuff that reliably brings jobs at a cost you're happy with. This is the engine.
- 20% on what's promising. Things showing early signs of working that you want to scale carefully. A newer channel, a campaign that's trending well but not proven.
- 10% on experiments. Genuinely new bets. A platform you've never tried, a wild offer, a different audience. Most will flop, and that's fine, because it's only a tenth of the budget.
Why not just put 100% on what works?
Because "what works" has a ceiling, and it decays. The keywords producing cheap leads today will get more expensive as competitors pile in. Audiences fatigue. If you never test anything new, the day your proven channel gets expensive, you have no backup ready. The 20% and 10% buckets are how you find your next winner before you need it.
Think of it as insurance. The 10% you "waste" on experiments is what saves you when the market shifts under your 70%.
How it looks in real money
Say you spend $2,000 a month:
- $1,400 on your best Google Search campaigns.
- $400 scaling a Facebook campaign that's starting to produce leads.
- $200 testing something new, like Nextdoor or a new service offer.
The $200 experiment either becomes next quarter's 20% bucket or gets cut, and you try something else. Either way you learned something for a small, controlled cost.
Be honest about which bucket things belong in
The rule only works if you're truthful about what's actually proven. A channel isn't in your 70% because you like it or because it's new and exciting. It's in your 70% because the cost-per-lead numbers say so. Move things between buckets based on data, not enthusiasm. Something in your 10% experiment bucket that starts producing graduates to 20%. Something in your 70% that's slowly getting worse gets demoted. Knowing what a good cost per lead looks like in your trade helps you judge honestly.
Adjust the ratio to your situation
70/20/10 is a default, not a law. If money's tight and you can't afford to experiment, run 85/15/0 for a while and protect what works. If you're flush and growth-hungry, maybe 60/25/15 to find new channels faster. The principle holds either way: most on proven, some on promising, a little on experimental. Never zero on the future unless you truly can't afford it.
Review the split every quarter
Sit down every three months and re-sort your buckets. What graduated? What flopped? What's your proven channel doing? This quarterly rhythm keeps you from either stagnating on old winners or chasing every shiny new thing. Between the free reading in our growth guides and a hard look at your numbers, the sorting takes an hour.
The 70/20/10 rule isn't complicated, and that's its strength. It forces you to protect what works, scale what's promising, and always keep a little money hunting for what's next. If you'd rather have someone manage that split and rotate the buckets for you based on real results, that's how Arbor runs your ads. Spend most on the sure thing, but never bet everything on it staying sure.