Part Two: Planning Your 2020 Holiday Marketing Budget

In our first post about preparing for the 2020 holiday season we discussed how to take a serious look back at what worked (and didn’t) about your 2019 holiday marketing and participating in a team-wide campaign teardown. We covered how to recap performance and spend metrics as part of your review and discussed the following budget questions:

How much did you budget? 

How much did you actually spend? 

How many days, if any, did you run out of budget and leave potential sales on the table? 

If you budgeted by marketing channel, what shifts occurred along the way?


In this post we’re going to dive deeper into your budget, specifically those last two questions. 

How do we objectively look at holiday spend and identify where we could have turned it up more? We’ll review a few clues, why this is important and what to do as a result. 

If your channel budgets shifted from the original plan, what does that mean? We’ll review how to have a thoughtful conversation around how this unfolded live. Then we’ll determine if these same shifts would have been made in hindsight, and if the total budget was sufficient to spread across all our channels.


How To Spot When You Could Have Spent More

This subject is more applicable to search, where the amount of available impressions versus what you delivered gives us a much better look into what happened. Let’s review the metrics and methods available to us.

Impression Share

Google has made a concerted effort to make it easier for marketers to get a sense of the scale possible in advertising and to make Google Ads the best channel for you to invest in. In order to do that they have to push improvements out that a) make Google ad spend more effective, and b) make it easier for us as marketers to see “how high is up?”. Metrics like Search Impression Share, Top Impression Share and Absolute Top Impression Share are ways Google provides a more complete picture of what was going on with our keywords. If we served 100,000 impressions and spent $1,000 in advertising with a 10% impression share, in theory we could have spent up to $10,000 on those terms. You will not be able to reach 100% impression share in most instances and not all of rank/delivery is based on budget, but by looking at impression share you’ll be able to get an idea of what you didn’t spend.

Click Share/Relative Click Through Rate (CTR)

This is a similar approach to using impression share to understand what you could’ve spent but from a different angle. Looking at these two metrics, we can get an understanding of the quality of our ads and how that impacted spend. If you have a low relative CTR, or have a click share lower than your impression share, this is an indicator of a potential problem with your ads. You were showing enough impressions to potentially spend more but there was something that stopped you from getting more clicks.With Expanded Text Ads you would refer to the different components of your quality score to look for ways to improve ad performance. Similarly, with Responsive Search Ads Google gives you an Ad Score that can inform your optimizations –

Do you need to add more headlines? Are you using enough keywords in your headlines and descriptions?

Google will tell you if you look!

Take this as an alert from Google to rewrite ad copy, test out different benefit statements and CTAs, or make sure you have the proper ad extensions in place.

Social & Display

In paid social and display we are able to spend almost unlimited amounts of money if we want. We constrict spend by narrowing targeting and setting a budget. Audience targeting is very different from the metrics outlined above.

Marketers often use lead generation or purchase data to gauge the impact of these channels. By conducting tests in market clusters you can use location data as well. If you have a more sophisticated attribution model in place for gauging effectiveness of upper funnel marketing, even better! Once we are comfortable with the impact that social and display ads are having on revenue and the overall business, we can start to make determinations about how much we can loosen audience targeting restrictions and begin to see how far we could actually push these awareness channels. Broadening targeting can cause large shifts in campaign performance; however, there are ways we can approach this in a thoughtful manner. For example, we mentioned using clusters of markets to measure impact of social or display advertising – we can use this same approach but use our historical audiences in one cluster and the new, broader audience in the other testing cluster and compare performance (clicks, leads/cost per lead) to gauge which is more effective.


Reviewing Channel Budget Shifts

Plans are almost never perfect, things always change along the way if you are actively managing your campaigns as you should be. After the fact what can we do to make this budgeting process even better for the next holiday?

Were There Differences? Why?

It’s straightforward to compare planned channel budgets vs actual spends and highlight where there are differences. Now that we have this clearly written out, we can circle back to the WHY. Did the team document (or can you ask them) why a budget change occurred during the campaign? Did the changes have the intended results? Common examples would be a) there were fewer available impressions in search than expected, or b) higher CPC than planned in social. These are all valid reasons. The point of this exercise is to force ourselves to examine what was done and why to facilitate the next conversation.

In Hindsight Were These Shifts Right? Any Consequences?

Let’s use an example that we shifted $5,000 from the budget for Facebook into Google Search. Google was showing a better return than expected and there was room to scale. That reasoning is a perfect case for making a budget shift; however, now we can use the power of hindsight. What was the result of this change? Did we see an increase in performance from it or can we determine that the Facebook ads, while less efficient directly, were indirectly boosting overall numbers, including search? Unintended consequences will happen along the way during a campaign, use this time to understand if there were any to better prepare for 2020!

Can We Identify If the Total Budget Was Enough? Too Much?

Along the way we have now reviewed three things: 1) where our daily budgets may have been insufficient in search, 2) how we could determine if our social spend could have been higher and 3) reviewed budget shifts during the campaign. Let’s touch on one last step. Was the total budget enough for us to achieve our goals? 

Try reviewing each step:

If budget shifts occurred and were net positive -> use the actual budgets for channels as a starting point

If budget shifts occurred and did not increase performance -> use previously planned budgets as starting point

If daily budgets in search were insufficient ->  + daily search budget

If social/display performed well and needed more -> + social/display budget

After this process we can begin to make adjustments to spend based on the environment and our goals. If business goals are more aggressive this year or a new competitor is eating into market share these should be added on top of the adjustments we just made.


Bringing It All Together

Hopefully you’re not worn out after that! We know it probably wasn’t easy, but this exercise is so important for your team to go through. Budget is one of the fundamental building blocks that has a huge impact on the success of what you’re doing as a marketing team. It can be all too easy to just use a dollar amount that feels comfortable or “adds up right”. By performing a full examination of the process you should be able to do even better during holiday 2020!

In our next post we’ll be talking about how to do a full Q1 YoY (Year-over-Year) comparison to see what differences in total quarter sales lift there were and how to correlate this to our holiday planning. By doing this, we hope to get a better handle on whether our advertising strategy was cannibalizing business or generating net new business we wouldn’t have gotten otherwise. Stay tuned!