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Section 508

June 13th, 2013

Mobile Strategy Handbook Chapter 3: Planning your mobile marketing budget for 2014

Media consumption is changing rapidly with mobile as the fastest growing channel and the gap is just widening. Mark Zuckerberg at Facebook and other top executives keep repeating the mantra of Mobile First now and some agencies even predict that 80% of their revenues will come from mobile within 5 years starting from less than 5% today. Whatever you believe the fact is that the majority of all web traffic will come from mobile devices within 1-2 years.

In most cases your current media partners won’t be able to advise you due to lack of experience or conflicting interests because their business model is still based on TV ads.

So how do you plan your mobile budget for 2014?

The answer depends on your overall objectives for digital marketing and services and the stage of your mobile strategy. First set targets for digital in terms of the share of your budget which will depend on audience (e.g. Coca Cola puts 60% of budget on digital for 14-24 year olds), online sales strategy and more.

Secondly it will depend on the mobile maturity of your organisation: (click on the tab below to see it bigger)

What should be the split between production and ad spend (display and search)?

As a reference the normal split for TV advertising is about 10/90 or 15/85 in favour of ad spend. But TV is a completely different format without interactivity and direct revenue. For web & mobile the percentage should be at least 20/80 but can be considerably higher in favour of production depending on the overall budget. Also budget the cost of an m-commerce or loyalty platform separately.

One of the best methods to come up with a split is to think about it in terms of POEM (Paid Owned Earned Media). If the site, app or content you produce (Owned) is great then publicity, viral and organic traffic (Earned) could mean that your ad spend (Paid) is minimal. Also ensure that there is enough budget for Owned media to start with or you might end up wasting your entire budget. Many mobile sites and apps are so poorly executed that driving traffic to them actually givs a negative customer perception. This nicely brings us to the next point.

How to budget for mobile websites and app development?

To start with a few basic rules:

  • every organisation or brand that has a website also needs a mobile site
  • every app needs a mobile website
  • every piece of content, Facebook page and Facebook app also needs to be mobile optimised
  • only do apps if there is a clear use case and purpose that will differentiate it from the mobile website

Budget for a mobile version of all web sites and campaign sites you plan to run during the year. See our blog posts about the cost of developing a mobile website or HTML5 site / Mobile Web App.

Budget for mobile apps when relevant, but make sure it’s sufficient to deliver a quality app. If you can’t, then don’t do it at all. If you don’t want to invest everything from the beginning then start with one platform (e.g. iOS) and then extend. See our blogs posts about the Pros and Cons about outsourcing.

How much is spent in a mobile marketing budget and how?

Here’s an example budget for an organisation or brand with an annual marketing budget of 10m USD. We’ve assumed that the organisation is a Mobile adopter based on the definition above:

 

In this case the organisation spent 30% of their budget on digital whereof 75% on desktop and 25% on mobile or 7.5% of the overall budget on mobile. This is still below the benchmark of over 12% media consumption on mobile but a good indicator of where things are going.

Come back next week for Chapter 4 on setting targets/KPIs and measuring results for mobile.

Tags: Brand Marketing Media buying & management Paid Media Paid Media Strategy & Planning Paid Search (SEM)

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