Determining a marketing budget, whether for your own company or for your clients, often signifies a fresh start at the beginning of the year. It comes with new objectives, some easily achievable and others more ambitious.

A recent online advertising landscape survey_ revealed that advertisers prioritize increasing ROI/ROAS as their primary goal. To ensure you are on track and delivering optimal results, it’s crucial to manage your budget effectively throughout the month. When it comes to allocating budget for paid media, there are several factors to consider. This post will delve into five key factors that influence how you should pace your paid media spending:

1. The point in the month you begin advertising
2. The advertising platform being used
3. Campaign performance
4. Campaign maturity
5. Holiday periods and ad scheduling Furthermore, I will explain how each factor can impact your spending strategy, enabling you to achieve your goals, including the more challenging ones.

1. Stage of the month

One of the initial considerations is the timing of your paid ad campaigns within the month. Starting fresh often involves delays due to asset creation, landing page development, and other factors. It’s crucial to have a clear understanding of your total monthly budget and the remaining time to achieve your target.

A simple approach is to divide your overall spending goal, let’s say $10,000, by the remaining days in the month. For instance, if you launch your ads on January 15th, you’d need to allocate approximately $625 per day. However, it’s important to consider the nature of your business (B2B or B2C) and the advertising platform, as these factors add complexity. We’ll explore their impact later in this post. The challenge lies in how time constraints and spending pressures affect your objectives. The platform you use and its infrastructure will determine your ability to spend a larger sum within a shorter timeframe comfortably. This can sometimes lead to inefficiencies, particularly with new campaigns that require learning time for algorithms. If asset delays eat into a significant portion of the month, shifting from a monthly to a quarterly budget strategy might be beneficial. This allows for a lower initial spend to ensure smooth operation and campaign launch. You can then increase the budget for the rest of the quarter and scale accordingly. However, this approach can become complicated with monthly targets, especially when sales teams rely on paid performance. Key takeaway: Ensure all necessary assets are prepared before the month begins.

2. Advertising platform

As mentioned earlier, the chosen advertising platform or combination of platforms significantly influences budget pacing. While platforms share similarities, each has its nuances, particularly in managing daily budgets. Let’s examine three major platforms: Facebook, Google Ads, and LinkedIn advertising. Facebook: On Facebook, the daily budgets you set usually align with your intended spend, especially when targeting large audiences. This predictability stems from Facebook’s impression-based charging model, linked to bid and performance, unlike search advertising’s CPC model tied to performance. With automated bidding and a reasonably sized audience, Facebook spending tends to be predictable. Budget control on Facebook operates at either the ad set (audience) or campaign level. Both options have their merits depending on the scenario. The choice hinges on the level of control you desire over budget allocation for specific audiences.

Facebook also offers the flexibility of a “lifetime” budget, determined during ad set creation, which dictates spending over a defined period:

This approach frees you from limitations imposed by factors like search volume that complicate budget pacing in paid search. The choice between daily and lifetime budgets is entirely yours. I personally prefer daily budgets for their flexibility, as I frequently tweak accounts throughout the month. Another factor impacting daily spend is the choice between standard and accelerated delivery. While standard delivery distributes your spending throughout the day, accelerated delivery prioritizes rapid spending. I advise against using accelerated delivery unless dealing with unique, time-sensitive situations. Standard delivery is the default setting.

Google Ads: Google’s marketing offerings have expanded significantly in recent years, encompassing new platforms and ad formats. However, the fundamental principle of ad delivery remains consistent: ad relevance (quality) and bid. Budget control resides at the campaign level, with distribution across ad groups.

Google Ads utilize a cost-per-click model, and delivery is influenced by bid, ad quality, and the “predicted impact of ad extensions and other ad formats.” In paid search, these factors, alongside fluctuations in search traffic volume, impact your spending pace. Both underspending and overspending are possible within a given timeframe. Underspending typically arises from poor ad quality, low search volume, or a combination of both. Overspending, however, results from overdelivery. Here’s how Google defines overdelivery:

Image source The key takeaway is to diligently monitor the pacing of each campaign against its set daily budget. Adjustments might be necessary throughout the month or quarter to meet your target spend. These changes could include:

• Creating fresh ad creatives
• Introducing new keywords or target audiences
• Implementing additional campaigns or ad groups
• Adjusting bids (raising or lowering)
• Modifying bid strategies Launched in the fall of 2021, the Google Ads budget report provides valuable insights into how Google manages your daily budget. LinkedIn: Similar to Facebook, LinkedIn empowers you to control the relationship between your audience’s receptiveness to your ads and your position in the auction. Factors like audience size, bid amount, and ad quality can contribute to potential underspending. It’s important to note the variations in LinkedIn ad formats, as some automatically include both desktop and mobile placements without individual control. This affects ad delivery and, consequently, the ability to reach your daily LinkedIn budgets.

3. Campaign performance

While seemingly obvious, a campaign’s performance should be a primary factor in determining daily budget allocation. When deciding where to direct your spending, consider these three aspects:

1. Scalability: If an audience delivers a substantial volume of results at a lower cost than others, allocate a larger portion of your daily budget to it. Audience size and search volume are crucial factors to monitor in this context.
2. Spend and Performance Trends: For established campaigns with a performance history, analyze the impact of different spending levels. This helps determine if increasing the budget would negatively affect performance.
3. Funnel Implications: What is the inherent value of the promotion? If it leads to direct sales or ROAS, you can readily determine the budget allocation to stay within your acquisition cost targets. If ROI is more complex to calculate, or if the promotion sits higher in the funnel and needs time to translate into sales, use the best available data to set a target cost-per-conversion and optimize from there.

4. Campaign age

Though a brief point, it carries significant weight. At the beginning of a new quarter or year, businesses often launch new campaigns or tweak existing ones. This can leave account managers uncertain about budget allocation for new and untested ads.

A sample ad from a McDonald’s campaign. The crucial factors to assess are your overall budget, the timeframe for spending it, and the goals attached to the new campaign (e.g., lead generation versus branding).

5. Holiday and ad schedules

When crafting your budget plan for any platform, factor in holidays within the month. Q4, for instance, is laden with holidays that typically result in lower B2B audience activity. If you are a B2B company or manage B2B clients, consider adjusting your pacing strategy at the start of the month to meet targets efficiently. In November and December, frontloading the budget at the beginning of each month would be a strategic move, keeping you ahead of your target compared to even distribution throughout the month.

Beyond holidays, you may have implemented dayparting or scheduled your campaigns to run at specific times during the week. This can be problematic in paid search if your scheduling is based on assumptions rather than data. If you are concerned about campaigns or ad groups reaching their daily budget limits, analyze when users are actively searching and clicking your ads. If this data isn’t readily available when launching a new campaign, allow a couple of weeks for data collection. You can then gain insights into when conversions are consistently happening without disrupting budget pacing.

Monitor budget pacing

While planning your paid media spending is crucial, don’t fall into the trap of a “set it and forget it” approach. Regularly monitor performance, either manually or through scheduled reports.