Marketing technology is advancing its pace, with innovative new platforms and approaches being released faster than ever. In an uncertain economy and inflation skyrocketing, many companies are rethinking their marketing budgets and trying to determine the best ways to be profitable. The pace of change in innovation and technology can make it difficult to determine what those digital marketing budgets ought to be. Find out how automation technology can help you optimize your digital marketing campaigns and determine the best budget allocation to ensure maximum ROI.
Several obstacles stand in the way of effective marketing budget allocation, both internal and external. These include:
- Unpredictable consumer behavior
- Economic uncertainty due to the COVID-19 pandemic (and the tightening of budgets as a result)
- The age-old issue of fragmented marketing teams
Fortunately, many of the advances in marketing technology can help make budgets stretch that little bit further. For example, automation makes time-consuming processes such as A/B testing much more efficient – and effective.
As marketing can cover a wide range of areas (search, social, ecommerce, display, apps, CTV, video, website, etc.), budget allocation is also a great candidate for automation. If done properly, it can turn a complex process into something automatic, adaptive, and optimized – freeing up time for your team to think about the bigger picture.
How to automate budgeting
“Brands need to understand what is working across publishers and embrace budget fluidity to quickly shift their spend to the elements of their programs getting the best response.”
There are many platform-centric budgeting automation tools, such as Facebook’s CBO (campaign budget optimization), Amazon’s campaign bidding strategy, and Google’s tools and settings. While these allow you to flex your budget around averages for the day or month, they don’t integrate with each other, leaving you with a fragmented approach to your cross-channel budget.
A third-party automation tool can give you a birds-eye view over a range of platforms and incorporate external elements such as day-of-week or -month, month-of-year, or various promotional occasions such as holidays. You can also carry out highly detailed analysis that would otherwise cost you a lot of time.
Marin Software’s Autopilot does exactly that. It allows you to:
- Find the right level of investment for your bid strategies
- Forecast trade-offs between spend, volume, and efficiency
- Automatically pace and maximize performance within your budget
Autopilot does this using a range of approaches that fall into the following categories:
Forecast expected conversions, revenue, and profit for your account or specific elements of your account. Autopilot can allocate spend across bid strategies according to your budget or efficiency target (CPA or RoAS).
Track your spend over the month,quarter, or custom tracking period and adjust as needed to keep you on target.
Apply predictive algorithms using MarinOne Bidding, which automatically incorporates over 75 signals to ensure responsiveness and accuracy across audiences, devices, location, and more. Add custom bid modifiers to adjust to external market signals that are relevant to your business.
When allocating budgets automatically, there are certain factors that you need to account for in the planning stages. It’s important to set goals that span the full range of your sales funnel and all audience segments. A typical campaign budget has to consider the following factors to ensure effective resource allocation: marketing funnel, campaign goals, campaign length, and budget focus.
The first consideration involves deciding if the campaign will take a full-funnel approach to engage customers throughout their brand interaction journey from awareness to retention. The next factor that affects budget allocation is the desired outcome of the campaign. This factor will help marketing teams decide the appropriate channels to use, geographies to target, and functions to perform.
Depending on the approach that marketers take, time can also have a significant impact on budgets. Smaller campaigns that run for short periods of time have a much smaller budget compared to campaigns that engage the customer throughout their lifetime. The final consideration for marketing teams is the focus of the campaign. This refers to the extent to which the budget determines spending. Marketing teams that have an efficiency focus might choose to spend more to achieve certain outcomes compared to a team that is constrained financially.
While the above considerations can provide an effective blueprint for the early stages of planning and budgeting for an online marketing campaign, it is important for marketing teams to develop and retain an in-depth understanding of how campaign performance is affected by financial decisions.
AI-powered software can help marketers effectively collect and analyze performance data to determine the point in the budget that offers teams the highest return on investment and adjust marketing budgets accordingly. Automated budget allocation also allows marketing teams to react quickly to changes in customer preferences, online behavior, or changing market conditions.
Candace Boren, Product Marketing Director at Marin Software, believes that a bid strategy is the best option for companies that wish to make the most of their marketing budgets. She shares that “capped bidding doesn’t perform as well near the level you have capped it at vs. uncapped automated bidding at the same level, highlighting why a bid strategy is better for managing budget spend than simply trying to ensure your daily spend adds up to your monthly budget perfectly.”
With a bid strategy in place and MarinOne’s pacing module adding the guardrails to keep you on track over the period, you shouldn’t have to worry about putting budget caps on your campaigns.
How to decide where to add incremental budget increases
With CPMs at all-time highs on Google and Facebook, marketers will have to get creative to stay within budget while making the most impact. That could mean testing new channels, testing new creative, timing and setting bids differently, and much more.
There are two major approaches that marketers can take to analyze campaign performance from a budget perspective and decide the point at which budget increments can be the most impactful; analysis by conversion rate and analysis by incremental lift.
Automation in action
The automation of these processes can have a direct and immediate impact on marketing campaign performance and can even help companies save money by optimizing resource allocation at all times. Japanese automotive brand Nissan found that collecting and analyzing data from keyword’s vertical, impression share rules, and more. The entire process is automated and allows Nissan to identify the point at which a customer is most likely to make a purchase and can ramp up engagement to increase conversion rates. This approach has allowed Nissan to increase lower-funnel conversions by 34% while reducing cost per lead by 8%, revealing exactly how a data-driven approach to digital marketing can help businesses fully optimize their customer outreach for the best results.
With so many variables at play in determining and managing digital budgets, it’s critical that marketers have the tools they need to stay on track while driving maximum performance.
When we set out to develop Marin Autopilot, our goal was to simplify life for digital marketers in such a complex advertising landscape. Simply give us your destination and we’ll make sure you get there.
If you are using Smart Bidding, not to worry. Autopilot works seamlessly with publisher bidding, keeping you on pace by adjusting the target for your Smart Bidding strategies, with the added benefit of transparency and control that you won’t get from publisher tools.