Campaign Categories
When establishing a media budget for the year, many of our clients employ some time-honored strategies:
- We spent $100k on LinkedIn last year. Let’s increase spend by 5% for this year
- Oh crap! We have leftover money from other departments, let’s spend it on paid search!
- We have to spend exactly $250k per quarter on Google because that’s what I have in my budget line item
- What would it take to test Terminus this quarter? Okay, let’s allocate exactly $20k for Terminus each quarter
The problem with traditional budgeting is it limits agility. It does not allow for wild success or detrimental failure. If sponsoring one event generates 10 closed deals, where are you going to pull budget from to sponsor similar events? If retargeting spends $15k less than projected, where are you going to allocate that extra $15k? Marketers and finance departments need a budgeting strategy that allows for major shifts based on data.
At Obility, we developed the TACO Strategy (who doesn’t love tacos?) to help address creating a marketing budget. TACO (Test-Almost-Core Optimization) strategy involves identifying a key result, for example cost per opportunity.
Once we have determined the key result we assign campaigns a category. Core campaigns meet or exceed our target. Almost campaigns are close to achieving our target, and test campaigns are the campaigns where we don’t yet know if they are going to hit our target.
Obility also has campaign categories for campaigns that may have different objectives. These campaigns include Branding, Vanity, Nurturing, and High Volume. For the campaigns that do not meet objectives, we categorize them as Poor Performers. A quick breakdown of the different campaign types:
- Test, Almost, Core, and Poor Performers are discussed above
- Branding campaigns focus on generating awareness in your target audience
- Vanity campaigns need to be run regardless of performance. These are the campaigns your boss’s boss’s boss wants you to run
- Lead nurturing campaigns accelerate sales velocity
- High volume campaigns generate cheap leads for your sales team
The benefit of campaign categorization is significant. It allows us to create a budget with the specific campaign objectives in mind. Branding campaigns have significantly different objectives than lead nurturing campaigns and we should not measure them to the same KPIs.
Categorizing campaigns also lays a great framework for budgeting and answering where best to allocate spend. Please note that campaign categorization is fluid. Test campaigns can turn into Core campaigns if they hit the target objective. Core campaigns can turn into Almost campaigns if they become too expensive.
When creating a marketing budget, utilize the current campaign category when making decisions.
Budgeting with Campaign Categories
With campaign categories in place, budgeting becomes much easier. For simplicity sake, let’s consider three different goals and how we would address creating a budget based on those goals.
First let’s consider the goal of increasing sales. Creating a budget focused on sales should put as much money as humanly possible into core campaigns. If sponsoring CTO-attended events is a core campaign, you should identify as many possible events with CTOs. If targeting your competitors’ brands in paid search are core campaigns, you should look to maximize the amount of traffic/leads from those campaigns: increase clickthrough rate, improve position, test a new offer to boost form submission. The trouble with core campaigns is there is always a limit. There are only so many events and so much search volume. You likely will not be able to spend your full budget on core campaigns. Secondly, you want to increase sales from your existing database. The next step is to carve out budget for lead nurturing campaigns such as retargeting and account-based marketing campaigns. With your remaining budget allocate dollars for your top almost campaigns and test campaigns. With a bit of work, you can turn almost campaigns into core campaigns and the right test campaign will meet your objectives.
A marketing budget for increasing sales would include as highest percentage as possible devoted to core campaigns, a separate budget for lead nurturing campaigns, and the remaining budget split between almost and test campaigns.
If your high level goal is to grow your sales database, your budgeting approach should be different. You may be looking to substantially increase your database because you have a large sales team desperate for leads or you have a strong email nurturing track. If your main goal is lead gen, you should devote a large percentage of your budget to high volume campaigns. High volume campaigns are great at driving top of funnel leads at a low cost. Calculate the number of leads your sales team needs and then calculate budget based on the average cost per lead of your high volume campaigns. Utilize the remaining budget on core campaigns because you are going to need some quick sales to pay for the high volume campaigns.
A marketing budget for increasing a sales database should allocate the majority of budget to high volume campaigns and the remaining budget to core campaigns.
Lastly, if you want to generate awareness, you are going to want to focus on branding campaigns. The trouble with branding campaigns is their effect is difficult to measure. Obility recommends identifying a set spend for branding campaigns and to measure success through share of voice surveys and branded and direct traffic. Again, you are going to want to offset the spend on branding campaigns with core campaigns.
A marketing budget for generating awareness should allocate a set budget to branding and the remaining budget to core campaigns.