There’s a Better Way to Optimize Marketing Than Moving Budgets Around

Marketers at companies with multiple brick-and-mortar locations are likely familiar with the incessant turmoil of moving ad budgets around, usually at the behest of their agency. Say Facebook isn’t performing in a designated market area, so the agency suggests focusing on another channel for that entire region. Or maybe social advertising isn’t performing in one designated market area (DMA), so the agency suggests pouring money into another DMA.

At multilocation or franchise brands, the problem with moving budgets to chase regional or channel optimization is that those efforts are insufficiently granular. Agencies make broad decisions based on DMAs and risk dropping channels that might actually be performing in parts of a region.

Instead, marketers should take a closer look at which channels and messages are driving conversions at each store. Granular analysis of these performance results on a per-location basis can reveal new opportunities for channel and geographic optimization. Here’s what marketers should keep in mind to devise tailored marketing approaches in every region — beyond just moving dollars around.

The First Common Mistake: Shifting Budget to Different Channels

Manipulating budgets between channels is where a lot of advertisers focus their energy, as doing so can yield fast results to wow clients and garner praise. For example, if search ads perform especially well in a DMA, an agency can turn up the dial on search ads in that region. This can produce easy wins, especially by performance metrics. However, it doesn’t necessarily drive incremental revenue, as the bottom-of-funnel customers who react well to performance marketing are often easy targets who already love a brand.

Chasing after easy wins also leaves other channels in the dust, abandoning progress that only becomes apparent by zooming in on the map. For instance, even if social ads don’t appear to be driving conversions in a large DMA, some ZIP codes with high populations of younger age groups could be seeing huge social marketing success. Therefore, it makes sense to leave the channel on in those communities.

Instead of switching channels in an entire region, marketers should focus on how channels perform for each of their locations. Consider how the buyer persona of a rural Florida retiree will differ from that of a young Miami urbanite. Breaking down channel success beyond DMAs can account for that variability, and making per-location channel decisions can drive precise budget optimizations without throwing money around and creating new problems.

The Second Mistake: Moving Money Between Regions

Similar to broad-sweeping channel decisions, moving ad spend to different DMAs makes the mistake of overgeneralization. Assuming that poor-performing areas cannot be rescued ignores the opportunity to understand those markets with more specific metrics.

Say, for example, search ads aren’t producing results in a DMA. In response, an agency might suggest moving search budget to a different DMA where the channel is already finding success. But what if, instead of running away from the challenge of a low-performing DMA, marketers tried to figure out how to make search work in that area? Are there certain communities within the DMA where search ads are driving conversions? Is some creative more successful than others in search? Are there patterns that emerge when you break down search results by storefront?

Rather than wresting ad dollars away from regions that need help, corporate marketers should dig into what’s working in those areas and capitalize on those trends to help all storefronts flourish.

A Superior Approach: Creative Testing and Per-Location Analytics

Beyond analyzing channel success on a per-location basis, marketers shouldn't forget one of the most important variables of all: creative. What are you telling people? How are they receiving it? Creative testing can set the stage for optimizations that build on existing success while also attracting new customers.

Like the other optimizations discussed here, creative decisions shouldn't be made across the board. Rather, by digging into which types of creative resonate with audiences in given locations, marketers can start to devise strategies that are optimized for each of their communities. For instance, if cheeseburger ads aren’t driving incremental gains in product sales for one of your stores, instead of advertising cheeseburgers in that area, maybe you can switch to advertising drinks and fries.

Listening to what works in each place will open up a whole new world of per-location optimizations for marketers. So, the next time your agency brings up moving around budgets, be wary of how impactful that strategy is. To drive results in channel and creative optimizations, data needs to be broken down to reveal the unique truths in each of your locations. Those insights will be what allow marketers to meaningfully optimize the approach for every storefront.

Kristian Kotsbak is the vice president of platforms and trading at Hyperlocology, a multilocation marketing platform.