by Eric Layland on August 29, 2011
The digital media budgeting question comes up often in the course of interacting with prospects and clients. It typicaly leads to an interesting discussion. Clients often assume that we follow a manual with the exact formula for the optimal mix of digital tactics like Search Engine Optimization (SEO), Paid Search (PPC), Social Media Marketing or Display Advertising. I only wish it were that easy! Instead what we find is that even when two clients have closely related products or services, there are always extenuating circumstances and distinctive characteristics that inevitably require a unique digital strategy for lead and customer acquisition.
With many years in the digital space (did I really start in 1996?!), I figured I’d poll my network and see what they thought. The thought of a survey crossed my mind for a brief second or two. Surveys turn back my mental clock to taking exams in college. (Something I wasn’t particularly good at but that’s another story.) My 2c is that a survey tends to capture what the respondent thinks is the “right” answer, like on an exam. I wanted real-world-cuz-I-have-done-this-many-times types of answers.
I acknowledge there’s no shortage of details that would alter specific recommendations. What emerged were some interesting differences between the groupings of respondents. The methodology for respondents was to allocate 100 points across the options that included: Display, SEO, Social Media, PPC, Usability Improvements, Email, Affiliates, Conversion Optimization and “Other.”
The two vehicles that had the largest discrepancies were Pay Per Click (PPC) and Email. B2C acquisition marketers favored allocating 24% of budgets to PPC while B2B averaged 16.3%. Perhaps this isn’t much of a surprise when considering the B2C marketers were primarily attempting to capture online sales. The discrepancy between B2B and B2C was more significant with how much budget was allocated to Email marketing. Again not a major surprise, B2B (20%) allocated significantly more than B2C marketers (7%). In the context of B2B marketers generating leads then wanting to nurture those until a conversion occurs, optimizing performance of the house list is understandable.
One big surprise that stood out was the minimal resources available for Conversion Funnel Optimization. Both B2B and B2C allocated about 7% of their budget to the effort. This is a bit of a mind-blower since media has likely been spent to acquire the traffic. Why would you not do everything possible to increase conversion rates? Recommendation: for those putting budget in the “Other” category, move that over to Conversion Optimization efforts.
For all the noise about social media, it ended up in the middle of the pack with B2C marketers more embracing of the channel (12% vs. 7.5%).
When looking at the results from those on the Agency side vs. the Client side, the differences in approach were more pronounced. There may be some bias as the contacts at agencies who replied were overwhelmingly from agencies that do a lot of search and social business. So maybe it’s not a surprise that SEO (22% vs. 8.3%) and Social Media (21% vs. 7.5%) had recommendations that reflected what they know and are good at? On the flipside, the client side may be veering away from activities that are, in the case of social, still in the experimental phase. Why clients would steer away from SEO is beyond me, but perhaps SEO is considered an expense that falls outside of marketing. Personally I find this to be antiquated thinking.
PPC is equally endorsed (Agency 21% vs. Client 20.8%) but Email more favored by the Client side. This isn’t a big surprise since the in-house email list typically has the highest ROI of the major online marketing channels. Clients understand this and want to insure they’re providing adequate funding to maximize the returns. That said, a distinction not made in the question posed was whether the budget was for new acquisitions (i.e. net new records to the database) or simply incremental sales or leads.
Another outlier I didn’t expect was that Display was as strong as it was for an acquisition exercise. My explanation for Display getting about 7% of the budget is that these marketers are savvy. (I wouldn’t hang around chumps.) They know that display can have a positive impact building visibility and awareness to fill the top of the funnel in an acquisition model.
None of the fields were mandatory. Conceivably a strong channel proponent could put their entire budget into a single option. So the responses were not evenly distributed, but when someone did opt for Other, they were committed. When Other was given budget, the average amount was over 20%. The most frequently mentioned “Others” were generic content creation, video content, retargeting/remarketing, mobile marketing and online PR.
The difference between B2B (12.5%) and B2C (11%) was minimal for amount of budget allocated to Other. Yet when comparing Agency to Client side, the Clients were more likely to order off the menu (17.5% vs. 4%).
In my view it’s what makes digital marketing so great and powerful – there’s no "one size fits all" solution. Having been primarily on the agency side during my 15 years in online marketing, even clients in the same vertical end up having sometimes wildly different budget allocations because we find their sweet spot is unique to their offer’s features and benefits. Start with a basic digital media mix recipe and tailor it to please your taste buds. The very best way to uncover the optimum budget mix for your situation is by testing. Take advantage of the data collected through web analytics to arrive at the mix that will enable you to meet your cost per lead (CPL) and cost per customer acquisition (CPA) goals.
Let us help you uncover the optimal digital media mix to reach your lead generation and customer acquisition goals. We are happy to answer questions about any digital tactic from search "basics" like SEO and PPC to social media, conversion funnel optimization, landing page best practices and more.