Maximizing your marketing spend can feel like stretching a dollar to cover a hundred—you need to calculate every move, ensuring that each investment delivers optimal value with minimal waste.
Focusing on strategies that offer the greatest potential return can help you use your marketing budget to increase conversion rates and enhance customer retention. This process should be adaptive, leveraging historical and real-time data to make informed decisions and drive targeted marketing efforts.
Let’s explore the six best tactics for digital marketing spend optimization to help you get the most out of your budget and improve your return on investment (ROI) across your media mix.
1. Use data to identify patterns and trends in marketing performance
Effective marketing budget optimization goes beyond data collection; it requires strategic analysis of emerging trends and historical data from insights from sales, campaigns, channel performance, customer interactions, and external market factors. In fact, 96% of businesses believe that leveraging data and analytics enhances decision-making and boosts strategic impact, according to Salesforce.
Keen, for example, leverages Bayesian methods and machine learning algorithms to accurately attribute sales to specific marketing efforts. With these insights, you can also identify the optimal spend to boost sales. Our algorithms adapt over time, contributing to enhanced forecasts based on new data and trends.
Keep learning: How to optimize future marketing spend
2. Build the right media mix
A well-constructed media mix is crucial for reaching your target audience effectively and efficiently. Break down performance data to:
- Identify the channels driving the best results
- Uncover detrimental overlaps or hidden inefficiencies
This analysis enables more targeted budget adjustments, focusing resources on the most effective media mix. Take the example of a non-alcoholic craft beer company that achieved a 52% net profit increase while spending 15% less. Their secret? They used Keen’s AI-powered MMM platform to find the right mix to accelerate their growth.
3. Take a scenario-based approach to your marketing spend
To optimize marketing spend across channels, you need to test and refine your strategies. Determining the most cost-effective approaches enables smarter budget allocation. But before adjusting funds, ensure a clear understanding of why certain ads or content perform better.
Analyze marketing metrics but ensure the performance is sustainable and not influenced by temporary or external factors. For example, if social media video ads start to generate higher conversions and lower costs than display ads, consider whether changing user behaviors or seasonality contributed to the results before shifting your budget.
That’s why we recommend scenario-based marketing planning: it enables marketers to anticipate and prepare for various market conditions and uncertainties. This way, you can adapt your strategies to changing conditions and seize opportunities in a dynamic environment.
With scenario planning capabilities, like those offered by Keen, you can:
- Test and compare different budget allocations
- Simulate the likely performance of a competitor
- Pivot your strategy to address supply chain, consumer behavior disruption, or other new market realities
4. Retarget campaigns to reach engaged audiences
Retargeting, also known as remarketing, allows you to reconnect with website visitors who haven’t converted. This is an effective digital marketing spend optimization strategy because you increase the likelihood of them completing a purchase or taking another desired action. Make sure to:
- Display personalized ads: Develop ad messages that resonate with your audience and encourage them to return to your website.
- Use various ad formats: Experiment with different ad formats (e.g., display ads, video ads, social media ads) to find the most effective approach.
- Set a budget: Determine how much you’re willing to spend on retargeting campaigns and monitor their performance to ensure a positive ROI.
5. Make the most out of artificial intelligence solutions
The State of B2B Pipeline Growth Study shows that 49% of marketing teams in the US face budget, headcount, or resource constraints. Artificial intelligence tools alleviate these challenges, automating routine tasks and helping you optimize your marketing budget.
You can use AI to:
- Aggregate and process large volumes of data across various channels, including digital, social, TV, print, out-of-home advertising, and more.
- Analyze the impact of your media investments, uncovering patterns and correlations in performance as well as forecasting outcomes.
AI can create a clear line between spending and results, so you better understand and communicate the impact of your marketing investments. Just don’t forget to continuously evaluate and adapt your AI models to keep them accurate and relevant as the market evolves.
6. Leverage marketing mix modeling
Marketing mix modeling (MMM) provides a deeper understanding of how different channels and tactics influence marketing performance, enabling more precise budget allocation. AI-powered MMM can analyze historical campaign data and forecast how different budget allocations will impact sales. This allows you to channel resources into high-performing areas and avoid less effective ones, resulting in a more efficient and impactful strategy.
Keen takes a Bayesian MMM approach, enabling:
- A more nuanced understanding of data, whether it’s historical or real time
- A probabilistic view of marketing outcomes
- A better handling of complexities such as the halo effect in marketing
Keep learning: The complete guide to marketing mix modeling optimization
Forecast and optimize your marketing spend with Keen
Keen has helped brands optimize more than $7.5B in marketing spend. Our adaptive MMM platform uses machine learning to continuously learn and adjust, ensuring your budget allocation remains efficient in a dynamic marketplace.
Keen analyzes data across multiple media channels, including social, digital, print, TV, out-of-home advertising, and more. You can connect to more than 300 integration and data sources. With real-time insights, scenario-based planning, and channel-specific recommendations, Keen helps you demonstrate the incremental value of your marketing dollars. You go from manually estimating to efficiently predicting outcomes.
Request a demo and explore the benefits of marketing spend optimization with Keen.
