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How to get the most out of your digital ad spend

Businesses are putting more emphasis on digital ad spend than ever before. It’s easy to see why: the coveted 16-24 demographic live increasingly online lives. If you’re running a business, the need to make your mark on digital and social channels is obvious.

But when you’re think of your digital ad spend, it’s essential to use it well and this is more easily said than done. The temptation to get into a war of escalating expenditure with the competition is difficult to resist, but a “keeping up with the Joneses” mentality can be actively damaging to your business.

Before increasing your budget, think about how you intend to use your digital ad spend. Every organisation accumulates customer data on a daily basis, and if it’s put to good use, it can help you create high-performing campaigns without forcing you to break the bank.

Here are four ways to get the most out of your digital ad spend.

(1) Manage your money

The first step, naturally, is to establish what your budget should be. Here, restraint is generally preferable to largesse.

The advent of big data has led some companies to believe that, when it comes to information gathering and analysis, ?more is always better. This is a mistake and one that often leaves advertising departments out of pocket. You could certainly invest your entire budget in creating data lakes, implementing data management platforms and programmatic algorithms, but it’s a lot of money to spend on something with no real assurance that the results will be relevant to your company’s needs.

Insight projects are often cheaper, and will generally allow you to put the information you’ve already gathered to good use. Analysing conversions and click through rates will give you a better idea of meaningful correlations and behavioural patterns allowing you to improve your targeting, segment your end-users properly, and boost your profits without draining your internal resources.

(2) Segmentation of your digital ad spend

Maybe, as the clich” goes, the customer is Always right?. That doesn’t mean they?re always valuable.

If they?re big users of your customer support services, they may well cost you more in man-hours than they paid for the product or service in the first place. If they?re returning products or demanding refunds on a regular basis, they?re also a net loss to your business.

While we often talk about data segmentation in terms of attraction and retention, it can also be used to identify the less desirable customers. Only when you filter out these less profitable prospects can you focus on the ones that matter.

(3) Retain and gain

Businesses of all sizes tend to focus on customer acquisition, but research has demonstrated that improving retention rates by five per centcan increase profits by up to 95?per cent.

The customers who already know who you are need to be persuaded to hang around: if you neglect them to focus on new business, it?ll hurt your revenues in the short and long term.

If any relationship gets boring or one-sided, it tends to wither and die. Put a little spice back into your customer interactions from time to time: create advertising campaigns with personalised deals and offers to appeal to people who already know who you are and what you’re about. Remind them that you care about their custom and they?ll be more inclined to keep the relationship alive.

Getting the most out of your ad spend and, for that matter, your data is more a matter of “how” than “how much?. If you’re trying to generate more sales, it’s always better to make the most of the information you have than it is to gather data that you can’t actually use.

Go deep, rather than wide. Embrace the data you already have. Your customer’s actions say more about them than any algorithm can tell you.

Jason Larkis MD of Celerity.

Image: Shutterstock


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