One of the greatest challenges for any marketer is to formalize a strategy for apportioning budgets for maximum channel implementation and ROI. While at the same time minimizing the risk of swinging towards over dependance on a small number of channels or the polar opposite extreme of spreading too thin for any channel to have the opportunity to support and add to the revenue bottom line.
This is increasingly ever more challenging with digital marketing, since new channels or micro channels seem to appear with a head of steam almost every day. Combine this with the ever changing nature of existing digital channels make budgeting in the 21st century nothing short of a stress induced headache.
In the ideal world, each business and marketing head, comes up with their own way to judge and measure their budgeting, allocating appropriate amounts to each channel (hopefully with some logic and research) and then optimizing their segmented marketing channels as traffic and results begin to come in.
My tried and tested method when launching campaigns and even more so when I’ve been tasked with the responsibility for building marketing departments ground up is the 30-30-30 rule. Since every campaign will respond differently to a different company or destination goal, no matter your previous experience it’s important to set a phase 1 methodology. the 30-30-30 works well in all initial decision making. The logic is simple, fragment your top tier decisions into 3 and allocate budget accordingly.
So for example, when starting out and planning required to strategize investment in people, services and media, simply go 30-30-30. This obviously can become complex and as such further decisions need to made as to which function will take care of which channel.
For me, a typical marketing department allocation of resources should comprise:
30% to employment of personnel
30% to traffic purchasing
30% to outsourced services
The reason for this logic is that it allows (and in some cases forces) me to make tough decisions on prioritizing and managing functions or campaigns.
Within each of these allocations, the 30-30-30 rule is applied again (traffic purchase investment will be split equally between; SEO investment (long term), Affiliate support (medium term) and media buying (short term)
The same logic should then follow through in other areas, for example. When building a marketing team, 30% should be ‘Money-Men’ (employees who’s work is directly measurable by bottom line results), 30% ‘Internal-Support’ (those who provide critical services to the team, including; analysts, designers, webmasters) and 30% to strategists (these often overlap the previous two, and will include middle managers and product managers)
By now you should be questioning the missing 10%. To be honest, this is both my favorite part and the most important to the mix. In every initial planning decision and ongoing optimization it’s essential to have a buffer. This is the ‘spare’ resources used to cover situations when you just know you’ll need an extra few bucks for a campaign but cannot be sure when or where. It’s the spare cash you need when a campaign needs an extra boost or when natural growth in a specific function necessitates the ability to expand without going back to the marketing plan and rewriting.
This 10% is also the fun part of marketing. It’s the place where creativity flows and experimentation begins. Without this 10% you’ll be forever bound by the preconceptions you begun with and the tight preconditions that result.
