The Importance of Diversifying Your Ad Spend
DIVERSIFYING YOUR AD SPEND
A diverse ad spend is a fairly straightforward marketing strategy to incorporate into your plan. Relying on a single strategy or marketing channel can be risky, since your digital footprint is essentially at the whim of a single platform. Imagine, for example, that you do all of your marketing through Facebook ads. Facebook is notorious for changing its policies, and if one of the updates is related to your business, your advertising could come to a full standstill, resulting in a significant loss of business.
To avoid issues like these that are impossible to predict, diversification of ad spend is a way to ensure that business isn’t affected by unexpected site updates. Here are a few reasons why it’s important for you to put your eggs in a few other baskets.
- Lower Risk : Like I mentioned, by diversifying your investments, you’re better able to mitigate the risks associated if one channel becomes ineffective. Continuing the instance above, when Facebook implements new targeting strategies or limitations, advertisers may experience things like higher acquisition costs while you try to rebuild your viewership. If that’s your only marketing channel, that time spent reidentifying your audience and the most efficient targeting methods is time lost.
- Wider Market Reach: On any given day, the average American will browse multiple sites or apps, which means each channel or platform is an opportunity. Even though most people use a handful of sites regularly, obviously we don’t all use the same sites. That means, each platform will cater to a different demographic. By expanding your spend to additional corners of the digital market, you’ll be able to take advantage of additional audiences you may not have been able to reach previously. For example, a customer reliant on email marketing might get a better response by connecting with their customers through SEO as well, or you may consider local print products as a way to drive foot traffic to a storefront.
- Improved analytics and identify new opportunities: With a diverse ad campaign, a business can compare analytics and measure the effectiveness of each campaign. This will provide better insight on your clients interests and behaviors. By comparing your active campaigns and ROI, you can identify any existing gaps in your campaigns and optimize the more successful channels. This means that you will have an easier time allocating your budget for the most optimal results.
A common baseline for marketers is the 80/20 rule - dedicate 80% of your budget to successful campaigns and channels, and the other 20% to advertising expansion. This way you’re constantly building on your audience which will help your overall advertising strategies.