The future of the advertising industry is being dramatically influenced by changes in consumer behaviour and the meteoric rise of social platforms, all leading to a noticeable disruption in the current marketing model. Here I’m detailing how to attack your marketing budget using benchmarks and metric driven analysis.

 

To stay ahead of the competition, as a marketer we have to constantly rethink our approach to budgeting. From a clean slate, you need to reimagine your budget by integrating success metrics and benchmarks with a future-forward approach. Doing so will ensure that your clients or your business is set up to connect with their audience in insightful, yet meaningful and effective ways.

The perfect time to do this is right now – unconventional approaches are causing positive disruption across all industries. Yesterday I viewed a case study detailing the success of a Snapchat campaign for a government organisation, powered by a partnership between a Video Production Agency and an Ad Agency; the results of which were astronomical. Think – 12 months ago, who would have considered running a Snapchat campaign to drive social awareness…

You can create opportunities for your client or business to cause disruption in the ad world by working on these key points:

 

Review and Rethink Your Budgeting

It’s time to leave the age-old process of building marketing budgets by tweaking last year’s plan up or down a few points. This process in no way technical at all, and leaves you prone to inaccuracy. By incorporating todays metrics and analyses, you can forecast peaks and troughs in your marketing performance and thus have your finger on the pulse right through the budgeted period. Running Adduco over the first two years, I’m embarrassed to admit that we were doing the wrong thing – plans such as “We’ll be spending $x amount on Facebook ads over these 6 months” – which caused a lot of hassle, particularly as business fluctuated and the performance of ad campaigns varied wildly in line with our forecasted predictions. By now incorporating benchmarks and metric-driven analysis we have our own budgeting down to a fine science, leaving us with accurate spend down to the dollar. To help make this change, here are four steps that we follow, and highly recommend:

  • Smarter Benchmarks and Objectives
    Start with clear objectives, aggregate affordable investment numbers and a blank budget template. Benchmarking can be as simple as selecting a few key metrics such as ad engagement rates and finding your own correlation between them and your ad spend. Don’t cop out and set empty, useless benchmarks that you know won’t happen, such as “We want 100 interactions per post on each social platform”.
  • Allocations
    Challenge your managers or advertising partner to create channel-agnostic budget allocations that will allow for the best chance of reaching organisational objectives. Honestly, it is completely worth talking to an agency like Adduco to see how you can best stretch each dollar of ad spend to maximise impact on all of your channels. Allocate smartly, instead of setting yourself up for useless conversions by throwing a set ratio to each social channel or ad platform.
  • Causation
    Challenge assumptions of causation that rely on historical models of customer behavior. Don’t rely on what worked last year – because I can almost guarantee that in 12 months time that all of your customers won’t reach you in the same way as they do now.
  • Investment
    This process is used for optimising marketing investment allocation rather than an a cost-reduction exercise, so be aware. When we implement these benchmarks with clients we emphasise that the purpose here is not to alter the budget, but rather to maximise your investment.

 

Include Non-Working Ad Spend 

A frequently overlooked and often underestimated component to a marketing budget is working vs. non-working media dollars. “Working” represents the bought ad space and “non-working” includes everything else needed to make the advertising– like research, content development and agency fees. Take a step back and think about how you can best maximise the percentage of working media out of the total marketing budget. For instance, don’t dedicate a huge portion to a campaign that racks up 10% of your overall budget. This balance between working and non-working made sense in 20 years ago when the only way to reach consumers was through paid, interruptive advertising such as TV and Radio, but in a world where earned media such as Social Media or Influencer Marketing has enormous impact, this outdated ratio of working to non-working dollars is no longer helping marketers succeed. The quality of an organisation’s insights, ideas and content is a huge factor in whether its message will resonate and gain effective reach, and all of these things are technically “non-working” dollars. On the flip side, in an era when consumers can so easily ignore interruptive advertising, marketers should not assume that all paid advertising is actually “working.”

 

Find Smart Metrics

The success metrics that organisations establish drive how the organisation approaches and works with their marketing strategy. For instance, I was taught to utilise a marketing mix model to determine the optimal allocation of ad spend. The problem though, is that earned media is generally excluded from the model as it can be difficult to forecast and plan for, thus creating a bias towards paid media and leading marketers to underinvest in areas. Additionally, these models often infer causal relationships between watching commercials and making purchase decisions using historical behavioural data, which often doesn’t apply in today’s media environment. For instance, it is not uncommon to see data from pre social/pre mobile times being utilised to predict how consumers will act today.

 

This proves my point exactly – you have to think ahead, incorporate new metrics and benchmarks, and understand that banking on yesterday’s results is never a good idea when it comes to generating your next marketing budget.