Digital marketing has evolved since the early 90s and now it’s far more complex. Today, everyone working in digital marketing has hundreds of tools and tactics at their disposal. We came a long way from individually booking online banners by email, to hiring AI or machine learning experts to help us predict performance of our automated campaigns. On top of that, the end consumers and their preferences continue to change dramatically. For instance, one of the recent trends is voice search, which is growing rapidly and according to Comscore is expected to reach 50% of the global search queries.
This constant change has a big impact on how we conduct our campaigns and develop our digital marketing strategy. It’s the responsibility of agencies, CMOs and marketing managers to ensure they make the right strategic decisions. Do we need to stay on top of all these changes to make these decisions? Fortunately, the answer is no; all you need to have is an opinion to decide when to engage these tools and tactics, and when to pass on the opportunity. But, of course, then do you need to be an expert to decide? Also here, I believe the answer no; a systematic process to make the decision is far more important that the deep expertise in the particular channel.
This is where my universal rules come in. I’ve decided to reflect on the last 15 years and write up some of the rules. The universal rules should help everyone working on marketing campaigns or learning the basics of digital marketing keep their sanity, whilst still being up to date with the most important trends. We start with one of the most powerful and fundamental rules.
Money management first
Money management is the process of planning, spending and controlling how the marketing budget is invested. It’s typically the most neglected part of the campaign management process. Money is sometimes allocated from the outset, or even worse, budgeted by the CEO on an annual basis and never updated. Agencies are engaged based on these, often with mistaken budget allocation. Campaign managers rarely see themselves as those responsible to challenge this. The rule puts money management first – meaning that we regularly review, challenge and adjust how the budget is allocated at the highest level possible. This process never stops.
I’m convinced that money management is the single most important aspect of campaign optimisation. This is where the biggest gains can be achieved with little effort.
How media budget allocation works
When working with business owners, CMOs or marketing managers we take an enormous responsibility to allocate their media spend or often their entire marketing budget. In some cases we provide our input, in others we take over the task completely. Here are some of the more important decisions that need to be made:
- What channels and campaigns we’ll invest in
- Where will the money be spent – country, region, city, district allocation
- When will the money be spent, including weekly/monthly phasing
- What demographic / interest will get the biggest investment
- What’s the agency fee for the campaign management, creatives, content etc.
- What are the models we’ll use to buy media (CPA, CPC, CPM)
- How will we reward our agencies? Fixed/variable or reward based model
At the end of this we come up with a media plan that looks more or less like this:
Media budget example – monthly spend by month
Media budget example – monthly spend by channel with projections
Once the budgets are allocated and approved we proceed with the campaign setup, management and subsequently the optimisation when the campaigns are live. This is where the problems start. This is when campaign optimisation specialists who are working daily at the very low level (e.g. keyword or placement optimisation) can’t see the wood for the trees anymore. They make micro changes and improve Click Through Rates or Cost Per Click etc. but the initial allocation is rarely questioned.
What does good money management mean
Have a process to question the media split
The media allocation at the highest level needs to be questioned at least once per month. For most campaigns I have a process, whereby I look at the data and review the previous allocation to plan the next month a few days before the start of the new period.
Know what to stop is key
Understanding what a good result looks like is important, trusting the data that you see, e.g. what’s the minimum number of clicks required to conclude that a campaign doesn’t work, or what’s the min Return on Ad Spend that we need to achieve to continue with a certain strategy. When you define the expected result, your goal for each channel or campaign within the channel it will be easy to measure and stop the ones that don’t work.
Large moves are better than small
This is particularly true at the beginning of campaigning. Micro optimisation of budget allocation can go unnoticed, make large & radical changes to gain unquestionable insights and learn. Over time your changes will be less radical and you can invest more time making lower level adjustments.
Include agency fees in calculations
Some campaigns need more media spend and look expensive, but don’t require so much management, others could be performing well, but require a lot of effort from the agency or engage a lot of internal resources. Always consider all of your external costs and internal efforts when evaluating your campaigns.
Once you’ve achieved the right budget allocation at the high level (e.g. channel) you can move one level lower (e.g. campaign) and optimise until you’re ready to move down again (e.g. keyword).
Never ending process
Regular reviews means that even top layers of budget allocation are regularly questioned. Your optimal budget allocation will also be out of date at some point. You should aim for incremental improvements over weeks, months and years.
The money management first rule applies to all campaigns, large and small, local and international. Implementing this rule correctly will give you not only better ROI, but also more focus on the most important markets, channels, campaigns or keywords.
In the next article of the universal rules in digital marketing series I’ll write about the power of insights.