5 Key Steps to Budgeting for Mobile Advertising
Important considerations for your 2019 marketing budget.
As you think about next year’s marketing budget, consider these 2019 projections from eMarketer:
- For the first time, digital will surpass traditional media, with a 53.3 percent share of ad spending.
- Mobile ad spending will account for 71.8 percent of digital ad spending and 38.3 percent of total media ad spending.
- As the two leading digital advertising channels, Facebook and Google together will capture 55.4 percent of digital ad spending.
Keeping these projections in mind, below are five key steps to budgeting for mobile advertising.
1. Set goals and make a plan.
The first step in planning your mobile advertising budget should be to determine what you are trying to achieve. Do you want to build brand awareness? Drive more traffic to your website? Generate more leads? How many more?
Your answers to these questions will greatly impact the amount you should budget and the way you should spend it. The more specific your goals, the easier it will be to reverse engineer your mobile advertising plan and budget in order to achieve them.
Say, for example, your goal is to get 1,000 clicks on a mobile ad. Considering the average cost per click (CPC) on Facebook for finance and insurance according to Wordstream is $3.77, you should budget approximately $3,770 to achieve your goal. (In comparison, the average CPC of localized, micro-targeted ads powered by the Denim platform is $0.33, so you would only need to budget around $330 to achieve the same goal.)
Your overall digital marketing goals should also play a factor in determining how much gets allocated to mobile advertising. Using the eMarketer projections as a starting point, you should likely be spending at least 50 percent of your advertising budget on digital, and at least 70 percent of that should be going to mobile.
2. Determine how you will measure results.
Without translating your goals into measurable key performance indicators (KPIs), you will have no way of understanding your ROI. As we shared in How to Choose Mobile Ad Campaign Goals That Get Results, mobile ad campaign objectives can be simplified into three easy-to-understand goals. Below are examples of KPIs that coincide with each goal:
- Awareness: Cost per click, click through rate, impressions, reach
- Engagement: Engagement rate, video views, time spent
- Conversion: Cost per action, downloads, registrations
By determining how you will measure results and gauge success before launching an ad campaign, you will be better prepared to adjust and optimize your budget to achieve the results you want.
3. Factor in additional costs.
When considering the overall cost of mobile advertising, try to think holistically about what’s involved. Even if you’re handling the work in-house, your team will have to spend time coming up with the strategy, developing creative, and tracking results.
Below is a rough estimate of how much to budget for each of the various activities involved in mobile advertising:
- Strategy: 10 percent
- Project management: 5 percent
- Creative: 30 percent
- Ad spend: 50 percent
- Tracking results: 5 percent
As you break down how much is being spent at each stage, try not to let the additional activities eat into the ad spend portion of the budget. If you haven’t budgeted enough for ad spend, it will be difficult to achieve the results you desire. Think about your mobile ad spend as an investment rather than a cost.
4. Break down your budget into shorter timeframes and check insights daily.
It’s easy to control mobile advertising costs by setting daily, weekly, or monthly budgets and checking performance on a regular basis. When you set your budget in the Denim platform, you’re setting an average. Let’s say, for example, you set a daily budget of $10 per agent. Certain days may offer better opportunities for your ad to get results. On those days, you may spend up to 25 percent over your daily budget, or up to $12.50 in our example.
By allowing some flexibility, social media platforms can take advantage of opportunities when they arise in the dynamic ad auction marketplace. However, you don’t have to worry about overspending because your charges will average out over a calendar week. If more of your budget is spent on a day with lots of opportunities for results, less will be spent on a day with fewer. This is easy to monitor within the Insights area of the Denim platform.
As with any step in mobile advertising, it’s important to experiment and learn by building and launching ad campaigns using various budget levels. Then monitor your costs closely and make adjustments along the way. Doing so will help you get the most out of your mobile advertising dollars.
Watch for exciting announcements in the weeks ahead related to campaign testing and optimization inside the Denim platform, and be sure to schedule a demo to learn more!