Dec 12, 2022
As you sit down to set your 2023 marketing budget, have you considered how inflation is affecting your media spend?
2022’s rising costs are no secret, and inflation’s impact is felt everywhere from the grocery store to the gas pump. In fact, March of 2022 marked the largest percent increase in inflation since 1981 (U.S. Bureau of Labor Statistics). One place you may not be accounting for inflation is in your marketing budget. Whether driving costs are forcing you to cut back on spend or you’re increasing your budget to keep up with the Joneses, here are three main points to consider.
Just as inflation is changing the price of a gallon of milk, it’s also making marked increases in the average cost of obtaining new users through advertising. For example, even a $0.10 year-over-year increase in a campaign’s cost-per-click (the average cost we’re seeing) can equate to thousands of fewer clicks over the course of a campaign. With diminished clicks, we expect less traffic and the potential for decreased conversions. If upping your media spend to account for inflation is not an option, your expectations for ROI, traffic, or lead goals should decrease equivalent to the increased advertising costs. In turn, consider sticking to your high-value channels or the places you know will drive the most return. However, if increasing your budget is an option, a 12% increase in your overall marketing budget for 2023 would account for the rise in inflation.
When the holiday shopping craze ensues, leading up to Black Friday through the end of the year, all major ad marketplaces (Meta, Google, TikTok, etc.) see increased advertiser activity from paid media. With more advertisers entering the auction, the cost to reach the same pool of users increases. If you’re planning holiday campaigns, or even non-holiday campaigns running during this time, plan to spend more so you can remain competitive.
While some media platforms welcome any spend, platforms with rising popularity like TikTok require a minimum daily spend that is sometimes out of reach for smaller budgets. For TikTok, this is currently $50 per day at the campaign level. While Meta and Google don’t have these minimum thresholds, most other social advertisers do: Snapchat and Reddit begin advertising at a minimum of $5 per day while LinkedIn requires a minimum of $10. If you want to utilize these platforms but can’t stretch the budget to meet the minimum threshold, consider shorter run times where you can maintain a higher daily spend. For example, test TikTok for 15 days at $50 for a total net of $750 instead of planning a month-long campaign. This is another time to focus on quality over quantity and stick to your top-converting channels instead of maximizing reach and availability by trying to be on all of them.
Mission’s Managed Marketing Services take the guesswork out of your paid campaigns. Drop us a line if you’d like to see how we can help you achieve your marketing goals in 2023.