How to Decide What to Spend on Paid Media With a Constrained Budget

This has been generated by AI and optimized by a human.

[00:00:00] Bennett: We get asked a lot, am I spending enough on paid media? How do I know this? What's the right way to look at it? What should my strategy be with a constrained budget? How do I defend that to my leadership team? These are all great questions. And I think really as we're thinking about it as a team, we really boil it down to three core principles. Let's talk about the first one. Who am I advertising to? Figuring out who my core customer is, my ICP, and who my product is built for is now critical to understanding who and how I advertise to them specifically. So if I'm selling a really high ticket item, maybe it's a boat that's built to a very specific audience, doesn't make any sense for me to broadcast that to anybody who has an interest in a ski and wake boat.

[00:00:41] Bennett: It makes a lot of sense for me to target that advertisement very specifically based off of household income, interest profiles, previous boat ownerships, boat service records that I can get through publicly available data. All that now becomes a game that I get to start to play of curating a small advertising budget to drive impact. The second one is really, what am I advertising? Am I doing a general brand awareness campaign? Well, if I have a really constrained budget, that may not make a ton of sense. I may need to be very hyper targeted in where that goes. If I'm doing a rebate or an incentive program, again, go back to who am I advertising to and making sure that the offer that I have lines up with the target audience that I'm going after. It really comes down to the third one and arguably the most important, where am I advertising?

[00:01:27] Bennett: Where am I advertising my products, my brand, my dealer network is critical because geography is everything in advertising. How much you're spending across the entire United States, North America, North and South America, just spreads those dollars so thinly. And in allowing the platform algorithms to decide that for you, you are giving up treasure troves of data that can help you refine that strategy. Where is your inventory located? Where is demand focused in terms of where we expect people to be buying at this time of year based off of historic and industry sales? And most importantly, where is sales trying to work with dealers to buy more wholesale orders? This is another great area that doing targeted advertising, particularly in the upper and mid-funnel in this area, it's a great lever to work with your sales team to sell more product through to the dealer, let alone through to the end customer as well.

[00:02:20] Bennett: So understanding the three of those as your levers to pull, if you will, with a small advertising budget is really the entire conversation we're having. So the question is really not, am I spending enough? It's am I spending enough to the right person on the right product in the right place to drive an impact for the brand? Let's make this real. How do I decide what to spend on advertising if I work at Pella Windows? If I'm working at Pella Windows, what I am saying about my ad budget is great. I'm trying to sell windows around the country and you know what? There's a lot of people who need new windows, but there's not a lot of people who are willing to make the investment on new windows today. So what are the data sets that I can use to build better audiences to make sure that I know who is going to be buying the right windows tomorrow, not 10 years from now?

[00:03:08] Bennett: And the ability to do that is us looking at public records that are available in terms of home ownership, looking at home interest rates and also home buying rates inside of particular states, counties, zip codes, and household income and moving patterns that's all publicly available with census data. That type of data set itself allows me to now know who actually is going to not just buy windows 10 years from now, but 10 days from now. Now let's talk about the offer. Now that I know who's going to buy a window 10 days from now, I get to start to play around with my offers. I get to say, okay, who wants to buy now, pay later? Who needs interest-free financing? Who can I do a specific lead gen offer around an in-home consultation that's really going to resonate? And now I get to have some fun testing that in a small scale in limited geographies.

[00:04:01] Bennett: So now I get to play around with geography. So I'm using that census data to curate the ad budget. Now I'm also looking at where, from a weather pattern standpoint, can ingest all of the weather app data into a data set and use that to build out a model of where should I actually show these advertisements? So now I get to basically storm chase with that 10-day audience. Not only do I have who's buying, what am I showing them, but now I have a data-driven way to figure out who I'm showing these ads to that's going to curate a limited advertising budget to drive window sales. JCB is looking at how they're going to allocate their advertising budget for the year and they're facing maybe some budget headwinds and they're trying to make a model to figure out, great, how do I spend this limited budget to drive success for my dealerships?

[00:04:49] Bennett: Let's go back to our process. We're going to look at who we're advertising to, what we're advertising and where we're advertising. Who am I advertising to? JCB is a treasure trove of data and industry data sets that are allowing them to identify the firms, the fleets that they need to be marketing their product to, to make sure that they're driving high volume unit sales demos, for lack of a better words, to make sure that those ad dollars are having really high ROI in a prolonged sales cycle. The second thing that I'm doing is I'm playing around with my offer. Great, I know I'm chasing big fleets, big firms that are going to buy a lot of product from us. How do I need to go out and do that? Or fleets that are not currently JCB customers, the ones that I'm going to be going after is playing around with a lot around financing.

[00:05:33] Bennett: I'm going to play around a lot with cost of ownership, with uptime and really focusing on that as the core message to convert people through on really like an uptime audit. How does JCB compare to my current equipment? Then for fleets that maybe have bought one or two JCB product but are not necessarily fully moving the fleet over to JCB at the moment, I can actually fly sidecar with sales with a really limited ad budget and remarket specifically to those individuals on cost of ownership, on service experience, on JCB brand promises, and on specific offers based off of the product they already own. This now curates my ad budget to be hyper targeted to new prospects and hyper-targeted to growing existing accounts and fleets that we're already working with. The last one's where? Great. There's a million data sets that make this a really intuitive answer for JCB.

[00:06:26] Bennett: The first is industry data. Where are people buying other products that is comparable to my JCB product around the country, around North America, around the world, where I have a lot of growth opportunity? I can use that market share data to help me figure out where I need to maintain and where I need to attack market share. And then additionally, I can start to look at job volume. So looking at the number of RFPs being issued from local and state governments around construction, around maintenance, around road building really allows me to start to say, "Oh great, there's some regional demand that's popping up inside of here that I need to play around with." The lastly is the end customer, which is really you and I who are driving on roadways built by JCB equipment or competitor. And that is looking at all sorts of keyword demand from everything from pothole service requests all the way through looking at patterns and construction delays inside of existing traffic that's allowing me to figure out geographically where there's hotspots that it actually makes sense to show some JCB product and focus on firms in that area more intentionally than maybe we currently are.

[00:07:29] Bennett: That type of media model allows me to then curate what could potentially be a diminished advertising budget to make sure it is directly in line with priority that we have from leadership from growing the business.