Strategy and goals
Budget allocation
How an advertising budget is split across channels, campaigns, audiences and ads.
What it is
Allocation is the most frequent big decision in paid acquisition. It is made at plan time and then remade continually as results arrive.
Why it matters
For lead generation and e-commerceWhere the next dollar goes matters more than the total. Spend left on a weak channel or ad is spend not given to a strong one.
In practice
Teams compare the marginal return of each place the money could go and move budget toward the higher one, within limits that protect learning and testing.
A common mistake
Allocating by last month's averages. The average return of a channel says little about what the next dollar will do there.