Media planner’s most important job is to allocate limited promotional budget across key digital channels in consonance with the messaging and objectives of online promotional platforms. They are also involved in negotiating the terms and conditions for placement on specific media and also the time for which promotions would be run. In the case of digital media, there could be a lot many parties with whom these negotiations need to take place considering the number of channels and options available. The four methods most commonly used for communication budget allocation include (from Philip Kotler, Marketing Management 14th edition):
- Affordable method: Communication budget is set depending upon what the firm thinks it can afford. This method looks at promotions as a cost and not an investment and makes long-range planning difficult for marketers.
- Percentage of sales method: Communication expenditures are set as a specified percentage of current or anticipated sales. Its disadvantage is that it again views sales as a determiner of communications rather than vice versa and ignores market opportunities and aggressive promotions as impact factors for sales.
- Competitive parity method: Setting communication budget in comparison to competitive budgets on similar products. The disadvantage is that competitor’s budget factors, resources, and constraints might not be similar to the firm and this might not be the best way of assessing promotional budgets.
- Objective and task method: Here marketers develop communication budgets by defining specific objectives, determining the tasks for executing those objectives, and estimating the costs of performing those tasks. The sum of all these costs is taken as communication budget. The advantage that this method has over others is that it involves managers taking a clear view of their objectives and laying forth proper grounds for a calculated approach to budgets, taking into consideration all the assumptions, thus, making it more scientific.
The key considerations which marketers should keep in mind for budget allocation include:
- The implementation stage with respect to the 6S Implementation Framework
- The business model (B2B/B2C), (paid, free initially), (advertising/subscription), etc.
- The type of investment, self-funded, and marketing media budget allocations
- Growth imperatives as put forth by promoters and stakeholders
- Prior experience of channel implementations and knowledge of intricacies involved
- Prior partnerships across key channels/affiliate types that can be leveraged
In the next section, let us study how a Digital Media Plan is measured, what are the key success criteria, and which are the most relevant evaluation parameters.
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