The Toughest Question to Answer in Marketing: Where Do I Spend My Budget?

Where Should Marketers Spend Their Budget?
Where Should Marketers Spend Their Budget?

It’s the toughest question any marketer has to answer when planning a campaign: Where should I spend my marketing budget? 

This is the point where campaign planning stops being theoretical and you become accountable for spending actual money to produce actual, measurable results. Screw up here, and you run the risk of wasting your budget, failing to meet your objectives, losing your job or client, and being fired into the sun. 

(You probably won’t be fired into the sun … but it depends on how badly things go. Can’t rule it out.)

Even in an era of data-driven marketing, with access to vast quantities of performance data and advanced tools like predictive analytics, it can be difficult to know exactly where you should deploy your budget in order to generate the greatest ROI. Why is that? 

  • Sometimes marketing teams lack the data necessary to make an informed decision, though that’s less and less likely for digital marketing channels, which measure performance in granular detail. And even offline channels like TV, radio and direct mail have methods for tracking impact.
  • For many marketers, it’s more likely they have too much performance data or what they have is not in a format that allows them to easily connect results to spend.  

To get the answers we need, we have to take control of our data and turn it into a tool for making better decisions. We have to practice marketing analytics. 

Taking Control of Data: Aggregate, Automate, Unify

What does that look like? There are three essential steps:  

First, you must create a single source of truth for your data — bringing together data from all your marketing, media and sales platforms in one place so you can assess how all your tactics are working together. You don’t have to collect every single piece of data, though. It’s better to spend some time deciding what business questions you need to answer, then determining the specific sources and metrics that will allow you to do so. Ideally, you’ll have created a strategy for consistently naming and setting up your campaigns, so it’s easier to track performance for entire campaigns and channels. 

You also need to automate your data. Aggregating your data is important, but a lot of marketers attempt to do that work by hand. They’ll manually download reports from source systems, then jam the data together in Excel or Google Sheets. It’s much better to use a tool that can automatically pull data from source systems and store it all in a scalable storage solution, like a data warehouse, where it’s possible to keep large volumes of data. 

And you need to unify your data. It means that, when you bring data together from different sources, you must find a way to make sure they’re all using common metrics and dimensions. This is tricky because, as an industry, marketing teams tend to use multiple media and channels as part of their campaigns, and each of those sources has its own way of formatting metrics, even for things as basic as the date. Unifying data can be fairly complicated, even for marketing analytics software, but it has to be done in order to assess performance at the channel and campaign level. 

Getting to Where

By doing all of the above, you’ll have created a foundation for valuable, actionable insight into your marketing campaigns. 

  • When your data is automated, and you’ve implemented a consistent tracking strategy, you’ll achieve rapid insight into what results your marketing is producing. So that big back-to-school campaign you’re running across email, TV and social? You’ll know how you’re progressing each day because the data is being updated regularly. You won’t have to wait until the campaign’s over to get a report.
  • Because your data is aggregated and unified, you’ll be able to employ attribution modeling to explain why your marketing is working and which channels are helping you meet your business objectives. Maybe social isn’t doing much for your back-to-school campaign — you could reduce your spend in that area and increase it somewhere that is making an impact. 
  • You’ll have a clear idea of when you’ll achieve your objectives because you’ll be able to pace your results against your campaign’s goals and budget. Let’s say your back-to-school campaign is tanking hard, and you’re not going to see the results you want unless you make a change. You’ll know that early enough to recalibrate your strategy and salvage your fall season. 

By answering these questions — what, why, when — you will have the information to know where you should spend your budget, too, not just for your current campaign, but the next one and the one after that, too. You’ve essentially created a system for using data to constantly learn from your past results. So when back-to-school season hits next year, you’ll be ready. 

It all starts with the data. Solve that problem, and every other question you’re facing, no matter how tough, becomes much easier to answer.

Ready to Take the Next Step? 
  • Need help getting your data right? Alight Analytics offers a suite of outcome-focused marketing analytics solutions that provide everything your team needs for insights and reporting, including our ChannelMix platform, marketing dashboards, data strategy, expert support and more. Learn more here.  
  • How do you get your data automated, aggregated and unified? You could write a book about the resources required for marketing analytics — in fact, our team did. Download The Buyers Guide for Marketing Analytics to learn what you need in order to produce in-depth insights and rapid reporting.