While brands may be tempted to scale back their paid media budgets, ad spending is one area of digital marketing where you may need to pay to play.
During my time as the director of media buying at a marketing agency, I had my fair share of experience in what does and doesn’t make for a successful paid media strategy. However, a lot of companies don’t realize that media buying isn’t meant to deliver immediate results. It usually takes time, persistence and, most importantly, a bit of your budget.
Media buyers usually need the time and budget to collect data, adjust and test. Here’s how a bigger budget can play into that.
You Can Collect More Data Faster
Spending more money on paid media can enable you to collect more data at a faster rate. Having more (significant) data can ensure that you’re optimizing your budget and impressions toward audiences, keywords, etc. that are most likely to convert. Having more data also can help you avoid premature optimization. For example, you don’t want to turn off or iterate on new tests for audiences, keywords, landing pages or creative before you have enough traffic and transactional data, as this data is what can tell you which ad combination drives the strongest conversion rate.
It’s important to allocate an appropriate amount of your budget toward your paid media campaigns so that they can run long enough to collect meaningful, significant data. This data is what informs the paid media strategy moving forward and can keep it as effective as possible.
You Can Be More Competitive
In order to be competitive in the ad auctions, you may have to be willing to spend money. For Google Ads, for example, you can put more money on keyword targets and achieve a higher ranking that can allow your brand (or product or service) to be more visible and relevant on search engine results pages.
Especially for Facebook ads, a higher budget per audience can allow you to optimize for more lower-funnel objectives like add-to-carts, sales and email signups. This can allow you to then optimize your ad delivery for your desired conversion event. One component out of the three in Facebook’s ad auction is advertiser bid. Having a higher budget can allow you to have a higher bid and ensure that you’re delivering your budget in full. Facebook recommends that you generate 50 conversions per ad set per week for optimal ad delivery and performance. So spending more can ensure that you not only remain competitive in Facebook’s ad auction but also that you can generate enough conversions to grow and scale your paid advertising efforts on Facebook.
You Can Reach More People
More spending often means more reach. More reach typically means increased brand awareness. Some of the largest brands in every vertical have high paid media budgets to support their growth efforts.
Paid social (like Facebook and Instagram), paid search (i.e., Google Ads), programmatic display, native ads and more are unique. Digital paid media is one of the few overarching channels that can allow brands to develop robust, full-funnel growth solutions. By having a larger paid media budget, you can allocate the appropriate amount of resources to each platform at each respective stage of your e-commerce funnel.
You May Have To Pay to Play
By allocating a bigger budget to your paid media strategy, you’re giving yourself the ability to collect data, test copy and creative, reach potential consumers at each stage of the funnel and position your brand as a worthy competitor in its space.
Spending more can mean collecting data faster. This, in turn, can allow you to better and more quickly optimize your budget for stronger performance. For example, if you want to quickly understand which creative elements of an ad resonate best with your target audience (like black-and-white versus color photos, video versus static images, call to action A versus call to action B), spending more can allow you to get a more significant sample of data to understand what you should move forward with to drive better click-through and conversion rates. Having more data in your toolbox (e.g., your backend analytics) and within advertising/paid media platforms can give you more insights and leverage as an advertiser to understand how you should be spending your money in order to drive results.
After collecting enough sample data for a particular campaign, audience segment or advertisement, it’s really important to take a deep look at the data. To be successful, ensure that you understand your marketing funnel and purchase cycles, and make changes that drive desired outcomes when necessary. For example, many prospecting/top-of-funnel campaigns don’t immediately drive sales since they’re a new user’s first interaction with your brand. But if you’re getting really strong engagement and traffic to your site, and you see that a significant number of users in that audience segment are later taking desired outcomes (like signing up for your email list, viewing products or purchasing), then you may want to leave that campaign on. You can then analyze other campaigns and understand how those campaigns interact with each other and produce synergies. This way, you can develop a really robust, full-funnel strategy that’s backed by data-driven insights.