4 Signs You May Be Suffering from Must-Increase-SEM-Budget Syndrome

Posted December 16, 2020

4 Signs You May Be Suffering from Must-Increase-SEM-Budget Syndrome

Posted December 16, 2020

What do we want?  Increased Budget!  When do we want it?  Now! 

Of course, we do. However, one common issue management faces – no matter the department – is a budget that doesn’t increase. Or worse: decreases.  Marketers managing SEM programs are not immune to this headache.  Their budgets are directly tied to the progression of the program.  So, it’s not surprising that budget constraints keep them up at night.  Let’s take a look at four signs you may be suffering from “Must-Increase-SEM-Budget” syndrome and some effective treatment options.  You may find that whether an increase is warranted or not, there are efficient ways to manage what you’re working with.

Must-Increase-SEM-Budget Syndrome Symptoms:

  1. Brand keywords do not have their impression share maxed
    • At Anteriad, our budget philosophy for SEM is to maximize the search impression share for brand campaigns or to get as close as possible (>90%). We do not want to present the opportunity for a competitor’s ad to be displayed while bidding on a client’s brand name – or even worse, for a competitor to steal a click or even a conversion.
  2. “Unique-to-your-company” keywords do not have their impression share maxed
    • As search marketers, we really shouldn’t overthink it: if it’s something only you sell, we can’t be lazy and rely solely on organic. Treat these keywords as if they are branded. We have conducted experiments for our clients where reducing/eliminating spend on these types of keywords resulted in significant (20-40%) declines in overall online revenue.
  3. Workhorse ROI campaigns (better than 4.0 ROAS) don’t have impression share maxed
    • Just because they are not branded campaigns doesn’t mean they aren’t performing like them!
    • Marketers with outstanding-non-branded campaigns know they need budget to maximize opportunity.
    • If ROAS is outstanding and impression share is under 80%, its time for more budget!
  4. 20% (or less) of your campaigns are below 1.0 ROAS
    • Wait what? I want more than 20% of the campaigns to be <1.0 on ROAS?
    • Yes.  More often than not, clients who chase ROAS are playing it too safe. They’re not testing enough.
    • And complacency can be a killer. Too many campaigns with >1.0 ROAS often means there isn’t enough risk taking and testing going on within the account.
    • Forward-thinking search marketers budget for up to 33% of their campaigns losing money. These campaigns become proving grounds for future workhorses and should be thought of as “subsidized” by outstanding-branded campaigns.

OK—My Business Is Showing Symptoms of Must-Increase-SEM-Budget Syndrome…What Are My Treatment Options?

  1. Spring Cleaning:  eliminate all campaigns with >50 clicks and < 0.5 to 1 ROAS that have been active for 60+ days and re-deploy budget towards #1-4 above
    • These campaigns are a drag on budget and do not deserve spend.
    • We make an exception for new campaigns (testing).
  2. Borrow budget from future months & monitor—if ROAS holds, add incremental budget to future months
    • This scenario assumes that the client’s goal for the month has been achieved two to three weeks into the month.
    • Our philosophy is to maximize the current revenue opportunity NOW vs. choking off a high-performing month, adhering to a monthly budget plan.
  3. Borrow budget from other channels that are under-performing
    • Anteriad’s Intelligence and Analytics team recommends as a best practice to keep a catalog of holdout experiments so the impact of making shifts like this can be modeled.
  4. Make a case for incremental budget, now
    • At Anteriad, it always starts with data. We prepare “what if” scenarios based on historical results and the impact any additional budget might have if applied.
    • Requesting incremental budget may be required if optimizing within the existing campaigns would result in “choking off” campaigns that are performing well.

Effective and responsive budget management requires marketers to continuously look for opportunities to improve campaign efficiency.   Being flexible and calling out pieces of the program that are lagging, or leading, will help SEM marketers improve their use of the spend and likely extend the life of it.  This is a win-win for all: the SEM program is a success, the company can realize potential growth and these marketers can finally get some rest at night.

Just what the doctor ordered.

Matt Gazzola
Search Engine Marketing Manager
mgazzola@Anteriad.com