What Is The Right Amount To Spend on Online Advertising

While reading this article found over in MediaWeek called Only Tentative Web Ad Spend During Primaries I kept thinking to myself what is the right amount to spend of your advertising budget on interactive. Before I continue with that train of thought, I want to write that the article itself is well informed. I do however get tired when people write as I myself have in the past "that candidates and their consultants are “creatures of habit” when it comes to media strategy. But, he theorized, when the brand is a living, breathing person, TV may remain preferred."  While that might be true for some it is no longer the norm, however it gets to my original question which is what is the right amount to spend on online marketing?

Now before you just jump in and start shouting percentages, let me lay down the rules.  First, this is a budget from scratch.  You can't optimize last year's budget because in politics it might not exist.  You might be a new campaign with new issues, new opponents, new followers, etc.  Second, search marketing does not count.  You are already planning on putting aside significant dollars on search and will maximize it.  Third, there are no real case studies that tell you if you spend $X on display ads you will move Y% of voters.  Fourth, free (except for campaign support) techniques like YouTube, MySpace, Facebook, and etc are not coming out of this budget.  Finally, as shown in this now dated AdAge study (I'm sure there is an updated one but I'm too lazy to look for it), the private sector is on average putting aside 5% of their advertising dollars on the internet.

So marketing genius, how much do you allocate to online advertising?  Seriously.  10%?  25%?  50%?  All of it?  What do you do?  What is the number you would recommend and how do you justify it to the campaign manager and the candidate?  What's your argument?  This is the same discussion that everyone has, political or private sector.  It isn't that much different except there are probably little to no benchmarks to justify your number.  Do you go after the Direct Mail budget?  Sure that sounds like a great idea to me, but believe it or not a certain demographic still responds to DM (you can guess the demo).  How much TV do you need?  I have my answers but what do you think?

Circa 2004/2005 at Harrisdirect we were running a ton of online advertising (17th largest in the US).  And as most industries do, the competitors were all studying what each of us were doing with our ad budgets.  It was then that I ran into an acquaintance of mine from TD Waterhouse named Stuart and he ran online advertising for TD.  Stuart said to me that they were reviewing competitive advertising spends and specifically the % of offline versus Internet for the sector firms.  That %, no surprise, fluctuated within an acceptable range for all the competitors except for Harrisdirect which showed a huge amount of online with little offline.  He thought it was hysterical because clearly our strategy was unique.  Personally, I couldn't tell him that his data was wrong and besides it helped fuel the legend of our online spending.  Even in the financial sector there are "norms" for spending, but those fluctuate based on brand, strategy, tactics, target market, and etc.

So I ask you once again, wanna be political marketing consultant or marketing critic, what is the % of dollars that you would allocate towards internet advertising and why?  How do you determine the % in your firm today.  SERIOUSLY, WHAT IS THE RIGHT ANSWER?  Why is it only "tentative" web ad spending?  Why isn't the tentative spending the correct amount (it isn't and really wrong when you look at search).  Here's a hint for you.  Whoever wins the nomination and whoever wins the Presidency will have spent EXACTLY THE RIGHT % EVEN IT IS ZERO.  You may not agree with that statement, but unfortunately it will be true.

PardonMyFrench,

Eric

P.S. I'm off to South Carolina to work on SC GOTV for Senator McCain's campaign.  Hopefully the next few posts will be showcasing an online veteran in a retail politics world.

Comments

[sir jorge]

I wish I knew the right answer.

[Jonathan Trenn]

It seems to me that you are creating a bit of a straw man here. Of course what you wrote there at the end is true. But that could be applied for DM, television, etc. The real question to me is less how much than how to best do it in the first place.

While I realize analysts and some pundits are going to be more concerned on dollars spent, the key behind any of this is strategy. If a candidate want to target moms in the Cleveland-Akron-Youngstown area, an ad buy online may make sense. If a candidate needs to shore up support amongst Latinos, an ad buy on Latin oriented sites may make sense.

But developing an overall strategy can be tricky in primary season. Hillary supposedly didn't have a plan for campaigning this late.

What's needed are people in decision making roles that understand online advertising as much as they understand the other mediums. I've worked for Pericles in 2003-04. We did the Bush online media planning. No seat at the table, no seat in the room, no seat in the building.

[Eric]

Jonathan,

Your information is dated as is your experience from the small online buy conducted in 2004 as part of pericles.

We do have a seat at the table, in fact last friday the entire ecampaign team for mccain 08 met with rick davis and not just the few people meeting on a daily basis as part of the senior team. We've had a well funded and industry leading interactive/search campaign from day 1 that has been key to the campaign. Plus we've spent quite a lot in display ads already.

I can't go into what happened with clinton or more details in our campaign. However, I believe hillary's issue had nothing to do with their lack of online spend; sometimes the message trumps any form of marketing tactics.

It is more important to win than figure out how much to spend on a tactic. Spending a lot online and losing makes for a poor case study. Personally being part of the mccain team going back to the pac and living the ups and downs is a heck of a lot more rewarding than figuring out how much to spend.

Eric