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:

  1. Bottoms-up approach

  2. Top-down approach


📘

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.


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


Did this page help you?