This time of the year always involved a lot of focus around budgeting, which can be a very painful process. I’m here to help you structure your acquisition budget in a morning. I’m assuming you’ve done some initial work on the budget and have an idea of what you hope to achieve. There are two ways of doing this; top down- we need to make x, how much marketing spend do we require. Or bottom up; what is our strategy, how do we think things are going to change next year, and as a result of these how should that impact our spend.
I’m more of a fan of the latter, so that you at least have a view of the possibilities and aren’t just trying to shoehorn spend into some unknown perspective of what could happen. This year is also very interesting with the credit crisis; two opposing forces having an impact on your budget;
1)credit crisis impacting spend (even online advertising is set to slow/become static)
2) offline budgets move online because its more measurable
Looking at your average budget for an online property there are probably three major areas; pr/offline, display and search. I always look at these as a pyramid depending on the markets that you work in. depending on how core the market is, how well you can scale and the competition will determine whether you progress to the next highest level in the pyramid.
1.) the base of the pyramind is seo- in every market that you work in, you should have your site well optimized.
2.) The next tier (and slightly less distribution) is bidding on your brand name and anything which people are searching for which is further down the commitment funnel (e.g. anything with the words buy or specific product names). Scale your search as much as possible moving into the higher volume and more generic search terms.
3.) Next step is to plug in your affiliates/anyone that you can pay on an action (registration perhaps or a sale). Use affiliate networks and start looking at the auctions (things like rightmedia)
4.) then move onto display advertising (placements bought for a media spend). Homepage tenancies, banners on specific channels, behavioural targeting. Its going to cost more but there are advantages with mass reach and a higher quality audience.
5.) . Finally for markets where you need to really differentiate your brand, I would recommend pr and then offline media (radio, print etc).
How does social media fit in? for me its kind of parallel and all pervasive. It fits into PR (obviously) and it also should underpin your strategies. The costs are not huge also, so I don’t budget considerably for them (also in terms of results its more intangible).
Going through these elements in a little more detail;
Should you be spending on offline activities? If you can prove roi go nuts. I think your pr spend should remain equal to the previous year unless you have new markets or proven cases.
you need to look at look at your cpc’s and the trend. I would expect the trend line of cpc to be increasing, if so extrapolate them out for the next year. Look at your conversions, are they increasing or decreasing? Once you have these two trends you can put them together with your strategy and come up with how much you expect your ambitions to cost you. of course if you’re entering new markets google is your friend (you can look at expected volumes, and google insights to guage what the market is like, as well as look at your top keywords and see the volume of competition). Everybody thinks that seo is something you shouldn’t budget for, I disagree. I’m not saying you should go out there and buy lots of links (hey, I’m white hat J). But I do think that you can always get more assistance in this area, even if you read all the blogs. From my own experience it gets kinda tricky when you start talking to the techies, as I know what I want in the abstract (clean code), and what that means (better css), but how to brief someone and ensure that it’s done properly is beyond me. So to cut a long story short, budget for some seo advice; optimization, universal search, link building, keyword rich domains- there’s lots you should still be doing
I lump anything that isn’t search into this, so it covers a multitude of sine (homepage takeovers, affiliate marketing, cpa networks and all banner networks). Its pretty straightforward, what are your costs, what is your performance (click through, conversions, value of the users that you’re driving) and what is the value of your user that you drive. Put it all in a form and look at where you’re making the most money and how much you can cost effectively spend.
Good luck with your process!
One reply on “top tips for budgetting”
There are people interested in this, things to be aware of and all sorts of stuff to be done aroung the home with reguards to budgeting. Just being aware and on guard is the key.