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Why you need a media plan and how it affects your media budget

Updated: Aug 20, 2023


Entrepreneurs, beginning marketers and people working with agencies often need to help to understand a media budget and its formation. Sometimes clients even say that marketing agencies take media budgets from the ceiling, which are not calculated. This is where the client's resistance begins: "It's expensive." And to calculate the budget, the agency needs a media plan from which the media budget is formed.


Let's start by drawing up a media plan


A media plan is a forecast of results after using paid advertising tools. You can study the sources section, company type, and selected category to make a plan. Working out the details is directly related to the goals stated by the client.


For example, my goal is to break even on Google Ads, and I will only make a single media plan for this by studying a cross-section of categories. I'll start by highlighting the tools I need for the job and categorizing them. For example, I want to reach a revenue level of $4000 in the Dresses category and $2000 in the Women's Sandals category.


It's important to consider that the conversion rate and margins in each stated category are significantly different; this is where it's essential to study the details in each category.


The media plan shows in detail how the specialist allocates the budget. For which category is more spending planned, and for which - less? There is also an approximate forecast of how much traffic will be received and its approximate price. There is also a numerical KPI that the specialist is aiming for.


The media plan is made for the client. You can see how much money is being spent and the projected result. Since payment is made in advance, the client must see what he chooses and where the finances will be paid.


In addition, I also draw up a media plan for myself. It shows what needs to be done, how much effort should be spent to accomplish the task, and how much profit can be made.


It is important to remember that a media plan can never be considered an explicit instruction for action, which does not allow for mistakes. It is an approximate plan of action and a preliminary forecast.


The result you will see at the end of the work directly depends on several critical indicators:


1. The competitive environment in the search engine.

2. The actual volume of the search query.

3. Significant difference between actual and projected bids.

4. The amount of traffic if the "Keyword Planner" does not respond to low-frequency keywords in Google Ads.


Given these nuances, no media plan can accurately predict how much traffic will be received, the price, and the number of incoming transactions a client will see after a job. You can not predict income accurately.


There is no universal methodology for media planning.


Even a specialist with significant experience can not accurately predict the results he will get after the work.


The main reason is hidden in the specialist's need for more information before starting work. Google, Yahoo, or Meta do not fully disclose information about the bidders. Often there is no quality analytics on your project, and more information about the market's capacity needs to be available.


A PPC specialist has no information about competitors' intentions. Everyone can predict the situation when a significant player enters the auction and immediately increases the cost of keywords. Accordingly, the click price will skyrocket. If the player gives up his intentions, the cost of a click on the same keys falls.


In the "Keyword Planner" from Google Advertising there is information about search queries, statistical data. But only some people know how accurate all the data is. It is essential to derive a coefficient to calculate the expected traffic, but even here there is no guarantee that it will be correct.


Example of media plan development


1. Determine the goal of promotion. Taking it into account, derive KPIs.


I aim to get 20 thousand hryvnias and keep the ROMI level at 100%. In this case, the calculation of KPI is the sum of transactions, income and ROMI.


Considering everything from the branding perspective, the KPI is the number of impressions and total reach.


2. Now it's essential to define the granularity. The client and I can settle for source information. Does it make sense to involve types of campaigns here? It's better to categorize everything. Here the work is done based on the task at hand.


If you are targeting branding and active sales, making 2 tables at once is much better. This approach will allow the KPI data to be derived separately, which will differ for each task.


3. Define the indicator. Here it is worth remembering that there is no universal solution. I give an example of hands that I use to develop media plans. If you wish, you can change the columns. The most important thing is that you own the information, how many users came to the site, and what number reached the KPI.


In my example, you can see that my goal was profit; the work used the specified indicators, and I calculated how much the goal was achieved on them.


In the following table, you can see what indicators I use if the goal is branding.


To get started, choose from which column to count. If the goal is income, you must forecast and request a budget. The calculation is performed from the last column with data. If there is no goal but there is a budget, you should calculate from the "Budget" column.


Let's work through the reception. The budget of the media plan is 2 thousand dollars. Request - what profit is possible as a result (use the first table for calculations).


4. Highlight the apparent variables. These include average check and transaction ratio. Thanks to analytical data, you can roughly calculate what the results will be.


5. If you need an analytics system, use Google Analytics. In some cases, the client uses customized plans.


You need to see if there is data for this request. It is better to follow the revenue dynamics by month. This way, you will see the trend of increase or decrease in the average check conversion rate. If you have little statistical data, use data from similar channels, but the probability of getting an accurate prediction decreases even more.


6. Draw conclusions based on the indicators. If the search engine advertising for 6 months (such a period is optimal) does not give income, there are mistakes in the beginning. Go back to those data and change the value of the coefficient, put it a little more, while it should be less than in the organic.


Remember that just a month of work will not yield excellent results. The process must be launched and carefully set up often as approximate values take an average check of $ 30 and a coefficient with a rate of 0.04%.

7. Take the approximate data and fill in the table; see how it is done in the example.


Predicted price per click CPC if desired; you can reduce it by lowering the percentage.


The client voices the size of the margin. Without this indicator, ROMI calculations are impossible.


You should wait to set a high bar; achieving it will not be possible. Optimizing the process will take several months. Break down your goals into periods. For example, you need to reduce the cost per click to $0.20. The desired figure is $0.40 this month, and in the next month, $0.30 only after you reach the desired value.


Work speed depends on what you can do to achieve the task. I will not offer you a universal solution - there is none; you work out the strategy yourself and listen to a specialist.

Types of media plan


In general, we can distinguish 3 variants of a media plan:


- Optimistic. The set goals are achieved within the agreed period.

- Pessimistic. With the same efforts, you do not get the desired result.

- Realistic. Find something in between these two options and move in this direction, developing an optimal media plan.


Let me tell you immediately; getting an optimal media plan takes time. You want to put the maximum figures and show the client the rosiest picture. It is also possible to purposely underestimate the statistics of expenses. As a result, the client will be happy, but in reality, nothing promised will happen.


You can immediately make 3 media plans and only the best one to give to the client. He can familiarize himself with all the options if he wishes.

I built my plan, taking into account the initial data of the client; in the case there is nothing, I take data on a given topic from personal experience. But even here, the probability of building an accurate media plan is low; there are too many unknown variables. No one knows how the users of the site will behave.


My media plans are only approximate and suitable for you if you have at least some data from the client; in the absence of statistics, the work is even more difficult.


What's the bottom line?


A media plan is a prediction of results using advertising tools. The plan elaboration depends on the goals the client sets for the specialist.


Making a media plan for the client and making a version for yourself is crucial. So the customer sees in detail how his money is distributed and what results can be obtained. At the same time, the specialist himself is guided by the media plan in his work.


The presented media plan can never be considered the truth. It is a rough development of your business growth plan presented on paper. No one can tell you 100% exactly what the number of transactions, traffic, and income will be - these are variable indicators.

There is no universal methodology for creating a media plan because the specialist needs to have all the necessary information. Its part depends on external and internal variables.


There should always be a variant of optimistic, pessimistic, and optimal development of events. The client can get all 3 options or only the optimistic media plan.


To get a sufficiently accurate media plan, your business must have a lot of historical data. It is perfect if the data is stored in modern databases, and based on it, clear reports are built in contemporary visualization tools: Power BI, Lookerstudio, or Tableau. If statistics are available, the accuracy of the media plan will be significantly improved.

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