Are you being flexible with your online marketing budgets?
As we are well into the final quarter of the year and with the impending holiday season, companies are frantically working out their marketing budgets for next year. While there is no question about the need for well-planned budgets, one of the main issues with many companies, particularly those that may not strictly fit into the category of a small business, is the rigidity of those budgets once they have been firmed up. These companies insist that their marketing budgets are set in stone and cannot be adjusted, without realizing that they would be shooting themselves in the foot with such inflexibility.
Kevin Lee, a Clickz columnist, has covered this issue at some length in one of his recent columns, and makes a strong case for why media plans should be a lot more flexible. (http://www.clickz.com/showPage.html?page=3623603). We touch upon some of the aspects highlighted by Kevin in this article.
Dynamic nature of online advertising/ marketing demands a flexible budget
Online advertising and marketing is evolving at a pace that makes forecasting anywhere beyond 3-6 months a serious professional hazard. New marketing channels with immense promise are mushrooming by the day while existing channels get even better with a continuous stream of features and functionality aimed primarily at targeting the right users. In such a scenario, there can be no bigger folly than being rendered immobile with too rigid a budget.
Seasonality: There are several factors that can necessitate an immediate change in the media/ marketing plan of a company. Seasonality is certainly something that marketers have to contend with; to some extent, one can plan for expected seasonal trends based on past history. However, every season inevitably throws up some new variables that one can only react to and it is the ability to respond to these variables that companies will certainly need to factor into their search marketing budgets. For example, keyword prices for some of the most important keywords might hit the roof during a particular season—does one just ignore the unexpected increase or make some allowances to accommodate those?
Competitor strategies: As Kevin points out in his article, competitor strategies can also have an impact on your online marketing efforts. Interestingly, the effects may not only be a result of what is done online but also what happens in the offline world. For example, a competitor might embark on a big viral marketing or word-of-mouth marketing campaign, which will undoubtedly trigger more searches related to the competitor. As a marketer, this is an ideal chance to “bask in reflected glory” and take advantage of the increased search volume with a few deft moves of your own. Question is, will your budget or media plan allow you to make those moves or will you be left a passive spectator?
Innovations and new options: This is probably the biggest variable- the pace of innovation and the roll out of new tools or features from various marketing channels. For example, say Google Adwords makes enhancements to the “site targeting” option that it currently offers, which makes this option a lot more attractive. Traditionally, site targeting has been more expensive than the regular bidding on the Google search network (or for that matter, even its content network) and therefore, it may not have figured in your search marketing strategy. However, you realize that the new enhancement(s) make “site targeting” a very good option that is at least worth trying out. As a marketer, you could re-allocate some of the spend from your existing channels to do a site targeted campaign, but you could be risking your current results by doing that. Does your marketing plan give you the leeway to get some additional funding to capitalize on these developments?
A better example may be the new opportunities presented by the emergence of new players or tie-ups between existing players. For example, take the recent advertising distribution deals between Google & MySpace (or MSN & Facebook) or Google & eBay. These tie-ups expand the potential of your advertising reach phenomenally and if the audiences are relevant, then why wouldn’t you take advantage of them? Or, consider the fact that there are rumors of Google taking over YouTube, which could throw open a world of online video advertising for online marketers. How will you leverage the new opportunity when it turns up?
It’s about being prepared
Of course, we realize the importance of thorough planning and the need for budgeting, as an organization cannot base its strategy execution on the unknown and unpredictable variables. However, organizations will need to build in the room to maneuver to take action based on what they see through the windscreen or the rear view mirror. So, when you sit down with your marketing planners or media planning agency, ensure that “dynamism” is taken care of, and will be continuously accounted for during the duration for which the plan is drawn out.
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