How to split an advertising budget

Dividing a budget equally between channels ignores their different costs and economics. The likely result is that no channel has enough weight to work, and it becomes impossible to tell what is contributing.

1. 01Define the objective and how it will be measured
2. 02Decide the role each potential channel would play
3. 03Estimate the minimum viable investment for each role
4. 04Fund the most important role first
5. 05Add further roles only where the budget allows
6. 06Set aside a portion for testing where it will produce useful learning
7. 07Include creative, production and measurement costs
8. 08Review and reallocate as results come in

Every channel has a level below which it is unlikely to work — too few impressions, too little frequency, too short a run or too small an area. Identifying that level stops the budget being spread into ineffective slivers.

Where people are already searching, capture channels often come first because the response is direct. Where demand is limited, some budget may need to go into reach media to create it. The right balance depends on the market and the objective.

A realistic budget includes:

• creative and production
• landing pages
• tracking and measurement
• planning and buying
• data and fulfilment for direct mail

Allocation should not be fixed forever. Compare results against agreed measures, allow for channels whose effect is slower to show and move budget towards what is working.