and costs are bound to rise.  As mainstream organizations shift their resources into the digital channels, the ipso facto consequence is that costs are going to increase.  Demand will push up prices, especially since there is massive convergence around the pinnacle services and platforms (Google, Facebook, YouTube, Twitter, Linkedin…).  So, how does one allocate one’s digital marketing budget in the best manner?

Allocating digital marketing budgets

I am often asked what is the right amount to invest in digital marketing?  It depends is the only possible answer.  Probably more than what is being spent today is the likely answer.  However, just as likely, the answer is also: differently from the way being done today.  As Jim Connolly wrote in a 2011 post, we should be more worried about creating effective as opposed to ineffective marketing.  For senior executives today, the challenge is first figuring out the right objectives in order to ascertain an appropriate return.  Then, one can focus on how digital may be a part of that mix.  The pressure on short-term results tends to handicap teams from experimenting.  The historical budgets tend to force organizations to anniversary campaigns with similar actions in order to hope to achieve the same lift.  Inspite — not yet because — of these pressures, organizations are throwing money into digital.  How does management cast away its old mindset and embrace the inevitable digital transformation?

Living digitally

When one doesn’t “live” digitally, it’s extremely hard to appreciate why, how and where people are consuming information.  In my opinion, this is not something you can intellectualize or delegate to a lower ranking person.  {Click to Tweet if you agree!}  Smart as one might be, a digital IQ is not something you can raise just by reading.  {Click to tweet}  The old marketing habits do not transfer seamlessly into the digital sphere.  I have observed that executives with a low digital IQ — and who have avoided immersing themselves in digital — will tend to make the classic digital marketing error: to want to just buy one’s way online {as cheaply as possible}.  When an organization decides to ramp up its investment in online or digital marketing, it is often extremely wasteful because of a combination of 3 major factors:

1. the organization is not mature enough to adjust to the required new mindset (for example: is it truly client centric? accepting of failure? willing to learn? willing to be more transparent?  able to act in real time in a coordinated fashion?…)
2. the digital strategy is not integrated upstream in the strategic thought process
3. from the outset, objectives and measurements are either terribly imprecise or overly rational, and in any event they are typically far too impatient.

Moving mobile into your digital marketing budget

Intellectually, we all know that we need to turn up the heat online.  And, it’s not just “online,” but on the mobile.  And, the shift is happening quickly.  Facebook has managed to find a successful mobile ad stream, with 23% of its revenues in the 4Q12 coming from mobile ads versus 0% a year ago.  However, I wonder how many top notch CEOs have experienced an ad that is geo-targeted or contextually relevant in their personal Facebook stream on their smartphone?  If they haven’t felt it themselves, how are they going to judge the pertinence of a digital marketing campaign that includes Facebook ads on mobile?  Intellectually, it makes sense.  The “big name” agency will probably recommend it because it can get paid for the “creative” and will duly negotiate the space with Facebook.  However, is the ad creating the truly desired effect from the customer’s viewpoint?

Stop intellectualizing your allocation

Because things are changing so quickly, it is impossible to limit oneself to an intellectual understanding of the internet and digital marketing practices.  It is my strong conviction that digital needs to be lived in order to be able to possess a viable personal opinion and to be in tune with the user experience.  The classic issue is that executives “don’t have the time” or they deem social media as still too ‘trivial’ for themselves to use.  However, this is not something that can be delegated away.  Without a true personal understanding, top executives will likely end up paying big bucks for inefficient campaigns.  And if the CEO isn’t living digitally, the question then becomes, who in the organization is?