Determining optimal budget allocation in Rockerbox
Here are some recommendations and best practices for leveraging Rockerbox to determine your optimal budget, whether it be to cut budget or allocate incremental funds.
Recommendations are broken out within two different lenses based on your approach to budgeting:
Bottoms-up vs. Top-down approach
Bottoms-up approach: You determine optimal budget per vendor & channel by determining optimal spend on a per campaign or tactic basis
Top-down approach: You determine the optimal budget per vendor & channel based on the overall ratio of spend and aggregated average performance of that vendor or channel.
Bottoms-up approach: You determine optimal budget per vendor & channel by determining optimal spend on a per campaign or tactic basis
Top-down approach: You determine the optimal budget per vendor & channel based on the overall ratio of spend and aggregated average performance of that vendor or channel.
1. Bottoms-up approach
What is a bottoms-up approach to budget allocation * You determine optimal budget per vendor & channel by determining optimal spend on a per campaign or tactic basis
When to use:
- You have extremely strict efficiency targets (CPA/ROAS)
- Need to arrive at optimal budget allocation per-channel
How to do:
- Identify individual placements and tactics that are over-performing vs under-performing against your target goal. See Tactical Optimizations in Rockerbox for guide on how to do this.
- Re-allocate budget on placement to tactic level (ex- non-branded search, prospecting, retargeting) * Arrive at optimal budget allocation per tactic and then channel
Typically Channels Used For:
- Mid and bottom-funnel channels.
- Paid Search, Paid Shopping, Paid Social, Affiliate, Display, Native
2. Top-down approach
What is a top-down approach to budget allocation:
- You determine the optimal budget per vendor & channel based on the overall ratio of spend and aggregated average performance of that vendor or channel
When to use:
- You want to ensure you have the desired spend split between branding and DR channels and spend allocation throughout the funnel
- This is necessary to continue to drive new users into the funnel and not cut off growth
- You need to arrive at optimal budget allocation per-channel
How to do:
- Determine desired % budget allocation for branding channels (vs DR)
- Analyze the incremental impact of branding exposure to driving conversions from DR and organic channels
- Isolating users who had branding touchpoints and increased likelihood to convert from DR and organic channels vs users without branding touchpoints
- Derive multiplier of halo impact from branding channels to driving incremental conversions from DR and organic channels, and apply that multiplier when deriving optimal spend for branding and impact to increased DR and organic conversions
Typically Channels Used For:
- Upper funnel and branding channels
- Linear TV, OTT, Video, Direct Mail, Sponsorships, Podcasts