An approach to advertising budgets for theatres and other ticketed events.
In conversations with arts organizations, I often hear a version of this: “We’re comfortable spending this much on advertising, as long as we’re selling this much in tickets.”
That is a useful starting point. It establishes a spending limit and a sales expectation. But it leaves an important question unanswered: could a little more advertising help us sell enough additional tickets to leave the organization better off?
For a performance with unsold seats, I find it useful to ask: What would we be willing to spend to sell the next seat?
That question connects the advertising budget to the opportunity still available. It also gives us a way to discuss spending increases without assuming that more advertising is always better.
A better sales result can come with a worse ratio
Consider two hypothetical weeks:
| Current budget | Higher budget | |
|---|---|---|
| Advertising spend | $450 | $900 |
| Total ticket revenue | $8,000 | $10,000 |
| Ticket revenue minus advertising spend | $7,550 | $9,100 |
| Advertising spend as a share of ticket revenue | 5.6% | 9.0% |
In the second week, advertising takes a larger share of revenue. But the organization retains $1,550 more after advertising, before accounting for any other additional costs.
If we judge only by the spending-to-sales ratio, the first week looks better. If our goal is to improve the financial outcome of the production, the second week may be preferable.
The word “if” matters. These numbers illustrate a decision; they do not demonstrate that doubling a budget will produce that outcome. We would need evidence that the additional advertising helped generate the additional sales.
Total sales are not the same as sales generated by ads
If an organization spends $450 on ads and collects $8,000 in ticket revenue, advertising spend equals 5.6% of total sales.
That does not mean advertising generated all $8,000, or that it costs $5.63 in ads to sell a $100 ticket.
Some customers may have purchased because of an email, a recommendation, a review, or an existing relationship with the organization. Some may have purchased without any additional marketing.
I separate three questions:
- Total sales: How much ticket revenue did the organization collect?
- Attributed sales: How much revenue does an advertising or analytics system credit to ads?
- Additional sales: How much revenue would not have occurred without the advertising?
The last question is the one we ultimately want to answer when deciding whether to spend more. Platform attribution provides useful evidence, but it does not establish that every credited sale was caused by advertising.
Meta describes Conversion Lift as a way to measure the incremental effect of ads. Formal experiments may be impractical for a small production, but the distinction still matters: we should use the evidence available without treating it as more conclusive than it is.
An unsold seat has a deadline
Once a performance starts, an unsold seat can no longer generate ticket revenue for that performance.
That makes ticketed events different from products that can remain on a shelf until next month. The time left to sell is part of the budgeting decision.
Suppose a seat would sell for $100. Would we spend $10 to generate an additional sale? What about $20?
Either could be sensible, depending on how much of that $100 the organization keeps and what it costs to serve another attendee. Ticketing fees borne by the organization, discounts, revenue shares, and other costs tied to the sale all affect the answer.
The $100 face value is also only an example. Use the actual expected revenue from the available seats, including likely discounts. A cheaper seat should not be evaluated as if it will generate the full premium ticket price.
Many production costs are already committed by the time this decision arises. Selling another seat may help cover them. However, revenue after advertising is not the same as profit, and the organization still needs to consider its overall finances.
Decide what the next sale is worth
A practical starting calculation is:
Expected revenue from an additional ticket, minus costs tied to that ticket, minus the amount we want to retain = an advertising allowance for that additional sale.
For illustration, a $100 ticket with $10 in costs tied to the sale leaves $90 before advertising. If the organization wants to retain at least $70 toward the production, that leaves a $20 advertising allowance.
This is a planning threshold, not a promise that ads can acquire customers at that price.
Also, a purchase may contain multiple tickets. Compare cost per purchase with the contribution from an average order, or work consistently at the ticket level. Mixing the two can make a campaign look much better or worse than it is.
Test a spending increase with a clear limit
A good current result gives us a reason to consider a test. It does not tell us what the next dollar will earn.
I would suggest agreeing on:
- The available inventory. Which performances need sales, and how many seats remain?
- The economic threshold. What is an acceptable acquisition cost, given actual ticket or order value?
- The spending limit. How much additional money can the organization afford to put at risk?
- The review period. When will we review results, allowing for purchases that happen after the initial ad interaction?
- The decision. What evidence would support continuing, reducing, or ending the increase?
For example, an organization could authorize a modest increase for a defined period and review ticket revenue, attributed purchases, acquisition cost, and remaining inventory together.
A stronger sales week would be encouraging, but timing, email activity, publicity, discounts, and the approach of opening can also affect demand. A weekly comparison is a useful operational check; it is not a controlled experiment.
Give creative testing its own purpose
A related budget conversation often concerns one ad receiving most of the spend while another gets very little.
Limited delivery leaves us with limited evidence. It is not enough, by itself, to conclude that the less-delivered ad cannot work. At the same time, distributing spend evenly is not automatically the best way to sell tickets.
If we want to learn whether a new video can generate purchases, we can propose a defined test with its own spending allowance and evaluation criteria. That allowance may come from the existing budget or from an approved addition. Either choice has a cost.
A one-week test may produce a useful signal, but a small number of purchases may leave the result inconclusive. Judge a ticket-sales test primarily by purchase outcomes, using views and clicks to help explain what happened.
Review the opportunity as opening approaches
I would rather establish a recurring budget conversation than rely on a fixed spending-to-sales ratio throughout a production.
As opening approaches, review the seats still available, the sales pace, actual ticket values, acquisition costs, and the money available to invest. A rising cost per purchase deserves investigation, but it does not automatically make a campaign uneconomic. Likewise, a strong reported return does not guarantee that a larger budget will work.
The question I want to keep returning to is: Given what we know today, is the next amount we spend likely to leave the production better off?
That is a more useful foundation for budgeting than either keeping advertising as cheap as possible or increasing it simply because seats remain.