How prepared are you for planning & budgeting season? Dave Chaffey shares some of the questions you should ask yourself when planning marketing investment.
Is your ad forecasting approach holding back your digital marketing?
As many marketing leaders in larger businesses enter what is often called 'the planning and budgeting season', it’s timely to think about how you approach this vital task - particularly for forecasting spend and targets for digital media. I’ll be diving into the detail of best practices for forecasting and budgeting with Rory Tarplee of ClickThrough Marketing in our upcoming webinar. In this article, I’ll cover why it’s so important to get this activity right, along with some of the key questions those responsible for creating and reviewing budgets for digital media need to consider.
As the importance of digital media in shaping consumer buying decisions has increased, so have ad budgets for digital media. Many businesses are now spending at least 50% of their ad budget on digital media as revealed by the IAB 2023 reports on ad expenditure in the last full year. These reports also shows that, whether its the US, UK or Europe, digital ad spend is still growing, so it’s getting more competitive. Taking the example of Europe (which includes the UK in this case), the below visual shows there was an increase of around 10% across all the formats for the most recent full-year reported on (with similar increases reported in the US) .
Let’s now take a look at some of the questions that can help you review your approach to forecasting which we will look at more detail in the webinar.
Q. How is digital budget forecasting integrated into your planning cycle?
Given the importance of digital media in generating leads and sales, it’s likely you are forecasting at some point when you are aiming to work out what leads and sales you will get from your media or ad budget for the year ahead.
In the webinar we’ll look at why 'Zero-based Budgeting' is now a popular approach and how often you should review and revise your forecasts and how you should break them down. Which brings us to…
How sophisticated are your budget forecasting techniques?
All forecasts are exactly that, they’re estimates of future results based on assumptions. Putting it another way George Box famously said: All models are wrong, but some are useful. So, it’s your job as a forecaster to state your assumptions and make the model as useful and accurate as possible. Some issues that we’ll look at in webinar which will affect accuracy are:
- How much you breakdown specific channels, e.g. Paid search can be broken down into brand vs non-brand spend, retargeting, different types of keyword targeting, e.g. generic, product, long-tail terms
- How you vary conversion parameters, e.g. clickthrough and conversion rates by media channel
- Building in seasonality
- Attribution and Econometric modelling
- Zero-based budgeting
How agile are you in updating forecasts and plans?
A year is a long-time in marketing, so it’s inevitable and good practice to change your approach to targeting and creative as you see what works and what does and as competitors change their tactics. If you have a more agile forecasting approach you can take advantage of opportunities that arise, for example from new techniques introduced by media platforms.
One simple technique we’ll look at in the webinar is applying the 70:20:10 rule in digital marketing
How do you assess competitiveness in digital media?
Digital media has been called ‘the most measurable ever’ and we can certainly track in detail how people engage with creative and what outcomes this lead to. However, this will get more difficult in the ‘cookieless world’.
What will remain useful is benchmarking since digital media platform like Google and Meta offer KPIs to help you assess your reach and engagement relative to competitors. We will also review these measures in the webinar.
Join us at 11:00am on 25th October to hear more.