Budget & ROI Optimisation
Working out what each channel actually returns, where the next unit of budget should go, and at what point additional spend stops paying for itself.
Überblick
Budget decisions are usually made on average returns, which is the wrong number. The question is never what a channel returned overall; it is what the next ten thousand would return, and that figure falls as spend rises in any given channel.
We model marginal return rather than average, find where each channel starts to saturate, and identify where money is better moved than added. It frequently shows that the best-performing channel by average return is already past the point where more budget helps.
Für wen das gedacht ist
- Companies planning next year's marketing budget
- Teams asked to justify spend or absorb a cut
- Businesses whose returns fall every time they increase budget
Unser Vorgehen bei Budget & ROI Optimisation
Die konkreten Arbeitspakete eines typischen Projekts. Der Umfang steht vorab fest, nichts davon taucht später als Überraschung auf der Rechnung auf.
True cost accounting
Media, fees, production and internal time. Returns calculated on media alone flatter every channel and mislead every decision made from them.
Marginal return analysis
What the next increment returns, not what the last year averaged. This is the number that should drive allocation and it is rarely the one being used.
Saturation curves
Where each channel stops responding to additional budget, so growth money goes somewhere it can still work.
Payback and lifetime value
How long until an acquired customer pays back, which decides how aggressively you can afford to spend today.
Scenario modelling
What a twenty percent increase or a thirty percent cut would actually do, so budget conversations start from arithmetic.
Reallocation plan
A specific set of moves with expected effect and a review date, rather than a general recommendation to spend more efficiently.
Vom ersten Gespräch zum gemessenen Ergebnis
Immer dieselbe Reihenfolge, damit Sie wissen, was als Nächstes kommt.
Collect
Pull spend, returns and costs across all channels including the ones usually left out of the calculation.
Model
Build the return curves and find the saturation points, with the assumptions visible so they can be challenged specifically.
Recommend
A reallocation plan with expected effect per move and the confidence attached to each.
Review
Re-run after a quarter with the actual results, and adjust the model where reality disagreed with it.
Ergebnisse statt Aktenordner
Ein Stapel Dokumente ist kein Fortschritt. Das hier sind die Veränderungen, die die Arbeit bewirken soll.
Budget arguments that end
Scenario models turn a negotiation about opinion into a discussion about a curve.
Growth money that grows something
Directing increases toward unsaturated channels avoids the common pattern of adding budget where it no longer works.
Defensible cuts
When budget has to come down, the model shows where it costs least, which is not always the smallest line.
A model you keep
The spreadsheet and its assumptions stay with you and can be re-run each planning cycle.
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How much historical data do you need?
At least twelve months, ideally with some variation in spend levels. Perfectly flat budgets make saturation impossible to observe, which is one argument for deliberately varying spend occasionally.
Is this marketing mix modelling?
It is a lighter form of it. Full econometric modelling needs years of data and a large budget to justify. For most companies a well-built marginal return model answers the practical question at a fraction of the cost.
What if our attribution is unreliable?
Then the model uses total spend against total revenue with holdout tests to calibrate, which is coarser but avoids inheriting attribution's biases. Sometimes that is the more honest approach anyway.
How often should this be redone?
Annually for planning, with a lighter quarterly review. Saturation points move as competition and creative change, so a two year old model is a historical document.
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