• Strategy

Ad Spend and Strategy

How much should you spend, and where should you spend it?

I have spent time reading online budgeting recommendations for digital activities in 2017, as I did in 2016, to examine the current trends and understand what platforms and activities were garnering attention. There are some great articles with interesting data that showcase that while digital advertising spend is increasing, it is doing so slowly. Clients we have been speaking with recognize that digital spend needs to be a good portion of their overall budget, but require guidance on how to strategically build the program and learn from it. Therefore, I thought it would be valuable to pair the learnings of this research with the strategy required for the first few months of a digital campaign.

Social Advertising

First three months – We use this time to test all the variables and assumptions that would exist for the product. Those assumptions are typically related to demographic information such as age group, gender, location and income. We target ads and content on Facebook, Instagram and Twitter and see what works and where the greatest proportion of conversions comes from.

During this testing phase, we try and ensure that our spend is low for each of the ads as to not burn through our budget while we are learning. We provide variation on copy, images, ad type (for example boosted posts versus standard ad placement), and location while also learning about click volumes related to peak success times and build all the correlations that we see. The tested demographics that radiated to the product would dictate which other platforms we should add like Snap, LinkedIn, Pinterest, etc.

Now is the time for refinement! All the data collected above would be discussed with the client and recommendations are presented to refine the ads for the best performing image, copy, demographic, timing etc. We would not recommend this be the time to increase your budget, but test the math on the CTR and conversions. If the digital spend of X needs to sell Y, we would determine that related to the click through and see if at a slightly larger budget those numbers hold true. During this time you are still somewhat testing - but with an increased understanding of your critical success factors. You want to make sure your assumptions hold true and your numbers are holding up. Crunch your math, add in outlier campaigns to stretch your thinking and make sure you are ready to go.

Search Engine Marketing

First Three Months - Unlike social advertising where part of what you are testing is demographic data to understand what other platforms to be on, in Google you are testing which delivery method works the best: search, display or re-marketing. During this testing phase it makes sense to create as many search or text ad variations that you feel are relevant (I would recommend three to five per desired conversion.) The spend in the test phase can be determined through the Google Keyword/Display tool set related to keyword and ad location (e.g. US, Canada, Worldwide) but I would say depending on the market, $5 to $10 a day is a great starting point. It will provide the right number of clicks to get you onto the next stage.

However, do not test without your ads being the best they can be. Ensure that you have Google "My Business" properly set up and all your site-link extensions created. Google will tell you that word choice and language are the drivers for success on search, so be sure to test that. Testing spend here is also very important. We have clients who are not the top ad on search results page but their ad performs very well, telling us that the language is spot on - and a boost in budget is what is required to push them higher in the rankings.

Make sure you are testing re-marketing right from the start and accurately determine what ads work where. Re-marketing variations can make you go cross eyed so look at your analytic data to decide what pages you are tagging, where you sending consumers back to on your webite and what ad you deliver depending on the action they take. In this case, you should select 2 or 3 conversions you want to increase and focus solely on them. A customer who returns through re-marketing efforts is very valuable, and obviously has a higher conversion percentage than a new visitor through search so your budget needs to be substantial here. Watch Google for their recommendations and pair that with assumptions and analytics.

Unfortunately in the last several months I have not heard much success with display. Clicks are either low value or there are not high enough click volumes to warrant the effort. Spend here would only be if search did not work.

As with your social strategy, search engine marketing needs to be consistently refined. With Google ads, you can start pausing ineffective campaigns, push additional funds to more effective ads, eliminate keywords and build your negative keyword list. Look at what is working and keep it going.

That covers two big digital marketing efforts for spend and test strategy. Hope it helps build your program. If you want more details or need clarity do not hesitate to reach out to me

Author: Shane Davis

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