EP18: Your Marketing Budget

“You can't scale your winning ad campaign in a linear
straight line. You have to be methodical about
it.”

Timothy Dick (9:51-10:00)



Managing your marketing budget is essential to getting the most
out of your campaigns and remaining profitable along the way. The
algorithms used by Google, Facebook, and other platforms give
today’s businesses the power to reach their target audiences and
convert them into paying customers. 


But these algorithms are complex, and there’s a common mistake
that businesses make when their ads are doing well. Thinking you
can scale your marketing in a linear fashion can cause you to
lose money and get worse results from the same campaign. 



“Facebook, Google, and other platforms have complex algorithms
behind them. There are many variables that go into how your ad is
shown, the cost per click, and who sees it.” - Timothy Dick
(0:53-1:21)

There are many variables that determine how your ads are shown. A
Facebook pixel can have more than 150,000 variables that have to
be analyzed to determine who sees your ad and who doesn’t.
Increasing your budget doesn't necessarily mean your returns will
scale proportionately. These algorithms ensure that your best ads
are shown to online users who are interested in your product or
service. This makes your marketing messages relevant to users and
maximizes the return you get on your ad spending.


The Biggest Mistake Businesses Are Making With Their
Marketing Budget


But most business owners make the mistake of thinking they can
scale their advertising in a linear way. If a business is getting
$11 back on every $1 they spend, they assume that spending ten
times that much will yield ten times the return. But it doesn’t
work that way. Algorithms take time to learn how to present your
ads in the most profitable ways. The results you get from an ad
are specific to that campaign. Throwing more money into it won’t
necessarily mean you get the same results. In fact, it can reset
the algorithm in a way that forces it to re-learn how to achieve
results with new parameters. 


These algorithms typically search for the lowest hanging fruit
based on your budget and target market. That’s why a successful
campaign may slow down or stop producing the same results over
time, even when you don’t change anything.  It becomes more
expensive and less effective. Making a drastic change to the
budget gives the algorithm more money to work with. But it will
look at more variables and different combinations, which can
confuse the algorithm and hurt your results. More importantly,
you may not be able to scale back and get the same results you
once were when you started. 


The Right Way to Scale Your Marketing


So rather than increase the size of a campaign’s budget, you can
get better results by creating multiple campaigns and leaving the
existing one alone. You can duplicate your campaign based on the
results you’ve achieved and create a new budget. This process is
repeatable and more likely to deliver consistent results. You
leverage what the algorithm has already learned, and you can
incrementally increase your budget to scale results. Increasing
the size of your original campaign can force the algorithm to go
from looking for something that’s one out of 500 to something
that’s one out of 10,000. That’s going to be a lot harder to do
compared to looking for a one in 500 across multiple
campaigns. 



“Advertising algorithms are really good for maximizing your
return. But you have to know how to work with the algorithms and
give them time to do what they need to do.” - Timothy Dick
(1:47-2:20)

Knowing how to scale your marketing campaigns helps you achieve
consistent and predictable results. Trying to scale linearly is
one of the biggest mistakes you can make. When you understand the
variables involved in how algorithms work, you can see that it
pays off to duplicate your campaigns and scale incrementally
rather than just multiply the size of your original campaign.
Taking a methodical approach like this will keep your campaigns
profitable and grow your business faster. 



How to get involvedIf you
would like more information about Timothy Dick, and the success
businesses have gained through work with him, please visit his
website.

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