So you’ve been reading about retargeting, how it works, what are the benefits you can get from it, and now, you’re ready to try it out? The next step is then determining your budget. It comes as no surprise that your budget should primarily be determined annually, meaning how much of your annual revenue are you willing to spend on advertising. But first things first, there are a couple of things that need to be accounted for, or actually, three: Where is your business at its current growth, what percentage of your profit are you willing to spend on marketing and, finally, how are you going to divide up that amount between your different marketing actions.
Let’s get started
Now, there are different ways to decide your total marketing budget – but going with a percentage of your annual profit is usually the simplest way. What you need to keep in mind is how much are you comfortable spending. You may have 20 000$ available, but if you are just starting out in programmatic advertising or marketing actions in general, you might want to test out the waters first and keep the budget to 10 000$. Afterwards, you’ll need to then determine what percentage of the amount you are willing to spend on display advertising, retargeting and other programmatic solutions. Keep in mind that in 2016, 22.1 billion dollars were spent in the US on programmatic advertising, representing 67.0% of total digital display ad spending. So there is no doubt that in 2017, companies of all sizes will sooner or later have to turn to programmatic if they want to stay relevant.
Once you have determined your annual budget, it would be easy to divide it by 12 and go from there. However there a couple things to consider, like your business seasonality: when is the high or low season, do you have specific selling events or promotions, etc. You also want to consider your budget planning around those events: will you start advertising a week before, a month, two months, and if so, at what frequency? These are all questions that can help you determine how to spread out your budget throughout the year and get the best ROI.
This might seem like a generic way to go about setting up your budgets, however, platforms like mypixel are built to help you optimize that budget – basically, you put in your maximum daily budget and duration of your campaign, and the platform will use its own algorithms and machine learning to spend it most efficiently.
A couple of tips when setting your budget:
1. Timing is everything
Promotions are a great time to spend a substantial chunk of your budget on retargeting. As promotions, discounts or big annual sales drive more traffic to your website, your retargeting list grows bigger and will be useful even after the promotion ends. That’s why it’s important that you plan your budget carefully around those season highs.
2. Don’t forget to test out
There are many ways to test out your ads before you throw your full campaign budget in. A/B testing is one great way to do it and has proven to be highly efficient in optimizing your campaign strategy – it allows to test out what headlines, colors, sizes and CTAs work better on your customers. Platforms like mypixel give you a clear view of your campaign performance and help you optimize your strategy. By testing out the waters with your ad creative, audiences and frequency, it will help you know what strategy works better and how to budget accordingly.
3. Get social, but don’t be fooled
Boosting a post on social media always seems the way to go, and while it is true that social media retargeting can generate great awareness and a good conversion rate, you need to know what metrics to look for. Of course, you may get likes and shares, which are good indicators of how successful you were at reaching out to your audience, but it does very little to say if your users actually converted to your website. In clear, getting a lot of interactions on social media ads should not be an incentive to allocate more budget to it – instead, watch out too for CTR and actual actions that were taken on your website (purchase, subscription, form submission, etc.).