The age-old dilemma of production cost vs media spend is ever-changing. In the madmen days, it was a relatively known rule that roughly 20% of budget was spent on production, while 80% was spent on media. But that’s not the case anymore.

Forty years ago, if a marketer set out to create DIY advertisements, first they’d be called crazy. Then, they would spend thousands of dollars just hiring camera equipment. And once they had the gear, working out how to operate it would have been near impossible. Today, anyone can pick up a camera, write some ad copy, cut together videos and even distribute content on social media themselves.

To further complicate matters, this ease of DIY production has prompted agencies and studios to offer cheaper, more low-key content creation, in order to stay in the game. Of course, there are brands that will continue to invest good money in the production of full-scale, multi-channel advertising campaigns, but these tend to be multi-national, corporate companies.

And finally, think back to the pre-internet days, when the most affordable advertising medium was a classified newspaper ad. We’re living through a digital revolution, where advertisers can spend as little as $5 and see measurable results. Advertisers can also anticipate how many people they will reach on digital platforms, which helps to calculate how much they’ll need to spend to reach their objectives.

And so we’re left with a sliding scale of production vs media costs, dependent on your brand values, social media objectives, desired reach and desired impact. Here are a few things for you to consider when determining what your split should be.

Audience Size

If you have a small audience you want to reach, you obviously don’t have to spend as much on media. Your audience might be small because of things like:

  • Geography (eg. targeting just New Zealand)
  • Easily defined and targeted interests (eg. pilates)
  • People who have visited specific URLs of your website

Often clients come to us with a broad target audience, wanting to reach entire continents. Unless you’ve got hundreds of thousands of dollars, you’re not going to make an impact. If you’re going international, the most important thing to do is restrict the geography. Pick a few key cities. But if you’re just targeting New Zealand, this isn’t necessary.

Rule of thumb: if your audience in Ads Manager is about 200,000, a lifetime budget of $500 – $2,000 is good.

Objective

If you have a conversion that you optimise for (eg. a Pixel Event), then your main consideration is giving the machine-learning robots enough money to ‘learn’ what type of people are going to convert. Usually a few hundred is enough, then you can establish a cost per conversion. If the numbers work for you, you can scale up your media spend.

Engagement

Generally, on social media engagement breeds reach. If people are engaging with your content or advertising, the platforms conclude that it must be interesting, and show it to more people for less media spend. In Facebook Land, this is measured as your ‘Relevance Score’.

In practice, this means your hilarious, shareable cat meme, or ‘man gets hit in the nuts’ video, is going to be cheaper to get in front of people. And, your ‘please consider engaging us for all your legal needs’ ad is going to cost an arm and a leg.

You’ll have a pretty good idea of where your brand sits on that continuum. But, it’s worth noting that we’re often surprised by what people find engaging, and what they don’t. So, keep an open mind, monitor, and measure your engagement rate.

Content Vs Advertising

Similar to the previous point, if your message has some kind of value to your audience it’s going to be cheaper to promote. We often ask the question, ‘is this an interruption for the audience, or is it going to fit naturally in their newsfeed?’. Some brands are natural interrupters, and that’s not necessarily a bad thing. If your product or service is a simple proposition that doesn’t require a lot of education, and doesn’t require a long thought process, sometimes it just doesn’t make sense to invest heavily in content. These brands are definitely in the minority though, and usually there’s a need to build a brand, from awareness, to understanding, to preference, and ultimately to purchase.

Frequency

This is one we see marketers getting wrong quite often, particularly in little old New Zealand where it’s possible to overspend and piss your audience off. Monitor your frequency, set frequency caps, and, if you’re spending more than $1,000 make sure you’re deploying a variety of creative executions in your campaigns. We see a lot of brands and agencies approaching social media with an old-school advertising mentality – a few posts per month that they agonise over and spend a lot of time and money polishing the fuck out of, then the boost them to kingdom come over a long period of time. The upside to this strategy is it gives the algorithm plenty of time and money to find the people who are going to deliver on your objective (often an awareness type objective e.g. reach or sometimes engagement). So your numbers can look good. But, if your targeting is really broad, this means you’re finding the people who are going to watch or click like, not necessarily the right people for your brand. And, the more obvious downside is creative fatigue – your brand doesn’t look fresh, and frequencies can climb. We’ve all experienced seeing the same ad over and over – not a good look.

Conclusion

Ultimately, how you split your budget is totally unique. It depends on what you want to achieve, who you’re aiming to reach and how you intend to do so. Just one word of warning: once you’ve set your own KPIs, keep a little budget up your sleeve in case things don’t go to plan, or in case they go so well to plan that you don’t need to spend the money at all. Hoorah!

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