We often struggle with the problem of budget allocation & budget saving especially when there are a lot of campaigns running across a lot of different locations. We either end up underspending or over-spending. Even if we meet the spend, the results are not satisfactory. So what to do in those situations?
Here are some tips that I have for you that will help you allocate budget as needed across multiple campaigns across multiple locations. Before I proceed further I shall have to pick up a scenario to explain it.
Hypothetical situation for Maintaining Quality Leads & Reducing Campaign Budget
You are running world famous diving centers in Thailand. You have different diving programs in which people can enroll and learn or experience diving at different diving spots. Here is a series of steps that should help you plan your campaigns and maintain leads while reducing campaign budget at the same time.
Analyze Historical Data
Well, if you have the past records of different visitors from different parts of the world then well & good because it is going to help you in budget allocation as well.
Step 1: Do historical data analysis
In an excel sheet, make the list of the top 10 or 20 countries from where you receive the most of the divers. Also, list out the name of the programs which you offer. Against each program, just put in the estimated average percentage or number of the tourists from that particular country.
If you have some previous campaign data. Pick the sample data from past as many years you can and fill in more details such as Cost per inquiry, Cost per acquisition, and inquiry to acquisition ratio (all averaged out). In the example below, I have only considered Open water diving. You can make the same sheet for other programs as well. It is a one-time investment.
Map demand & supply
Once you have the above data, you might be tempted to invest more in India and Australia looking at the above data table. But what you are currently looking at is the campaign performance data. Is there any real demand in India and Australia for the diving beyond what you have captured? If so, then you should surely go in to invest more budget.
But how find out the demand & supply for the budget allocation?
Here is another set of rules that I like to follow, though this is just the basic idea. Through keyword planner & Google trends, try to see if there has been any increase in the keyword search volume for the diving. If yes, then, measure it how much percentage. You can take year on year increase in the search volume data and list that out in the excel sheet.
Then increase the budget accordingly as the search volume increase percentage. However, if you are going to increase the budget in all the targeted countries, maybe you will get the number of leads that you cannot accommodate. In that case, a part of your budget will go wasted. So you need to normalize the percentage across the entire countries. But before we do that, let us find out the new budget.
If supply remains the same:
In some cases, the supply remains the same even though the demand increases. For example, at Harvard University, the number of applicants keeps on increasing year after year but the total number of seats to some programs hardly change year after year.
Thus, I am assuming here is your capacity was around 700 acquisitions and you can hardly handle more than that. If you look at the table below, you would want all the leads from Thailand itself but again you cannot capture the entire market there because there is not much demand there.
So now what to do?
Let us calculate the new number of leads with the new budget starting from the country which has the lowest CPA and let us find out the new leads with the new budget.
If you see now, the total number of leads with the new budget I am getting is 780 which is much beyond my capacity now. I have assumed the cost per final acquisition as the same as the previous year. We can also change it hypothetically but that will lead the discussion to move towards data side which I do not want to go into right now because I want to keep this discussion simple.
So now, look at the country which has the highest final CPA and adjust your new final acquisitions there and accordingly the cost and recalculate your entire campaign budget.
Because the cost per final acquisition was very high for the US, I decreased the number of acquisitions from the US from 90 to 4. In other terms, I removed 86 extra acquisition which I did not need. This way, I removed the costliest leads while capturing more leads from other markets if my capacity remains the same. So, let us calculate the new budget now.
My new budget is 313032 instead of 346850 which I spent in the previous period. So I saved around 9.75% of the cost. In this way. I maintained my quality leads while reducing the campaign budget at the same time.
What to do with the new budget now?
There are a lot of different things that you can do with the extra budgets. Here are some tips:
- Invest the extra budget in the top two to three locations from where you are getting the cheapest acquisitions in the branding purpose.
- Create a remarketing campaign and test for new conversions.
- Otherwise, you can also invest this extra budget in exploring other digital marketing platforms such as Facebook.
Let us say that all the calculation that we did above was based on the only search text campaigns in those cases, we completely missed out the facebook & Instagram audience besides Google display network audience. Thus, my suggestion would be exploring new platforms and try ads there. See if you are new better-qualified leads at a cheaper price so that you can shift your budget from one to another platform.