Advertising budget
As a CFO, are you getting your worth out of the digital advertising dollars that you so frequently spend? Are your advertising budgets giving you measurable business results?
Rather than just relying on the results you receive from the CMO showing how successful your digital ads were, you need to dissect the ad spend and determine if it was a wasted budget or not.
But how do you do so?
Here are some areas that you should be extra careful with when allocating an advertising budget.
Spending on Ad Tech Middlemen
According to a report by the ISBA, most businesses spend about 50 percent of every advertising budget on tech go-betweens instead of showing ads. A similar study by the World Federation of Advertisers in 2015 supports the same result. But are these ad tech middlemen helping you reach your business goals or not?
Most of them sell all manner of services, including audience segmentation, targeting, brand safety, fraud detection, and unique advertising tech. Even though they did not know how they work, they reassure you that the tech will work.
While some of the services they offer work, others are only shiny objects without any value. When you fall into their marketing jargon, you will lose close to half of your advertising budget.
Wastage of Money through Sub-optimal Leakage
Digital advertising is not new to sub-optimal characteristics leakages during campaigns that lead to a waste of money. It refers to simple tech mistakes such as the posting of an ad campaign out of geography due to the wrong algorithm. As such, the ads appear to users in the wrong countries.
Such mistakes are common since it is ad tech algorithms that buy and sell billions of ads that spend your money.
Another wasteful way to spend your ad money is through over-frequency or day-parting problems. While showing an ad several times may be suitable in grabbing attention, it becomes annoying when you show it too many times. Additionally, when your ads only show between 12 midnight and 4 am, they may not be as effective since most people are asleep by then.
Ads Appearing on Fraudulent Sites
Which sites are your ads appearing on most? Media agencies may advise you to buy ads through pragmatic channels for a much larger reach at a low cost. However, most of these unknown long-tail sites are fake. It is for this reason that they are not costly.
The sites come with safety, viewability, and fraud detection tech that makes it appear very legitimate. However, instead of humans viewing your content, it is thousands of bots view it. Therefore, you may also be paying for viewability and fraud detection services that are not delivering the right results.
As a CFO, you should be aware of how every cent is spent in your digital marketing and the results it delivers. Always ask questions, especially if the marketing budget is spent heavily on buying pragmatic ad tech and digital advertising. Failure to follow up may make you lose money that you would otherwise have spent elsewhere.