Two of the earliest rules for everyday living are “Plan ahead” and “Make a budget, then stay within it.” So it’s no wonder that for decades, media work has consisted of figuring out how to plan and spend precisely to budget — not more, not less.
Through my experience working with top media planners, I have observed this to be an effective approach in the offline ad world, where planners look at their target markets and their strategies — increase penetration, boost market-share gain, and so on — and buy ad space accordingly. In the offline world, planning ahead is generally the smart thing to do because the early buyer frequently gets advantageous pricing and positioning.
But the online world is a vastly different place. Online campaigns offer challenges and opportunities unique to the online world that are difficult to meet using offline planning and budgeting techniques. Online advertising also rewards those who remain nimble, flexible, and farsighted enough to leverage online’s unique properties to their advantage. For instance, the simple budgeting process, while typically straightforward in the offline world, offers an opportunity to gain strategic advantages in the online space.
Online is the first closed-loop advertising venue. For the first time, advertisers can test their campaigns in real time to determine what works and what doesn’t, who’s interested in the message and who’s not, and which creative draws them in and which creative leaves them cold. Admittedly, online’s ability to generate precise numbers is a double-edged sword because advertisers are so enchanted by its unique real-time ROI measurement capabilities that they tend to overlook online’s role in brand building. Nevertheless, it is the closed-loop nature of online advertising that enables smart media people to plan and budget more flexibly in order to test results throughout the campaign.
If you have ROI-focused goals, you can use Internet advertising as a true direct-marketing medium: Messages are targeted to sites based on viewers’ demographic, geographic, and psychographic profiles; direct-response ads can be deployed; and results can be continuously analyzed for efficiencies of selected sites, messages, promotions, prices, and creative designs. The difference between online and offline direct marketing is that any aspect of the media buy can be quickly adjusted to optimize performance.
Therefore, when you develop your program, it’s very important to overplan the media. Let’s say the actual budget for a campaign is $500,000. The smart move is to plan for $800,000, knowing that you are going to be evaluating and changing sites based on what you learn as the campaign progresses. If you plan according to the budget, by the time you determine what’s working, it’s too late to make changes — attractive inventory will be gone. By lining up sites in the queue, you can put your initial test dollars to work. After allowing enough time to test each site’s response and conversion rates, you can make decisions.
So, the first of the two rules I mentioned at the beginning of this article still applies: “Plan ahead.” Budgeting $800,000 of buys for a $500,000 campaign gives you the flexibility to cancel what’s not working, put more dollars into sites that are performing, and still get the most from the original $500,000 budget.