Bigger Isn’t Always Better When It Comes to Budgets

Many people assume that a bigger budget automatically means better results. On a level, it makes sense. Empirically, anyone can see that increasing budgets definitely improve some metrics immediately.

What’s more, many advertising platforms emphasize this message, that by spending more you’ll see improved traction, and quicker.

But there’s a lot more to this than meets the eye.

When it comes to budgets, “bigger isn’t always better” sounds counterintuitive. Moburst’ll show why this actually makes sense, and what you can do to ensure that your budget is deployed in the most effective way possible to meet your goals.

It’s How You Use Your Budget That Counts

Of course, there are many advantages to having a large budget. Most marketers wouldn’t say no to an increase in their potential spending.

Moburst wants to emphasize that bigger isn’t always better when it comes to budgets – if you have the perfect campaign, and are achieving key metrics that are orders of magnitude greater than anyone else on the planet, then dial up that budget immediately!

If you think there might be room for improvement, and you want the most effective campaigns possible, then keep reading.

So what are the very real drawbacks to a bigger budget? Moburst’ll summarize a few of them:

Hiding Inefficiencies

Bigger budgets are notorious for keeping inefficiencies buried below the surface. There’s often an “if it ain’t broke don’t fix it” approach, which could be hiding multiple inefficiencies.

These could be audience-related, inefficiencies around low-performing creatives, or any other aspect of the complex ecosystem that surrounds a paid marketing campaign.

Expensive Mistakes

Bigger budgets often get burned through a lot quicker than smaller ones.

There’s also more incentive to launch a campaign before it’s fully optimized, only to discover errors or under-optimized elements down the line; but not before these have already come off the credit card.

Less Optimization

When the budget is tight and the demands are high, optimization is key.

Results are constantly being scrutinized, A/B tests are being carried out, data is analyzed, and all of this happens with relatively minuscule amounts of the budget until the campaign is lean and mean – and effective.

Only at this point is the accelerator depressed and the full budget released. With bigger budgets, many parts of this critical process are more likely to be skipped.

Incorrect Metrics

You’re running a massive budget. You’re hitting your targets in terms of download numbers.

You’re pretty happy with your cost per download In fact, everyone seems to be happy with the cost per download – it’s been steady for the last two quarters. But what happens if that cost per download could actually be half of what it is right now?

The entire organization is based on a metric that’s just wrong. This has tremendous implications for the company as a whole.

Real-World Examples of Budget Use

There are too many examples of companies misusing large budgets, and organizations with shoestring budgets that really made it count – far outperforming competitors with deeper pockets.

It comes down to boxing smart: making the best use of your budget by planning well, leveraging the experience and expertise of a trusted partner, and thinking outside the box to create a more powerful impact.

A favorite example of Moburst’s is when it comes to app downloads. Some companies, with big budgets, cycle through a large portion of their budget on an ill-advised strategy, that gets them nowhere.

Others trickle out their budgets, getting less than satisfactory results, and definitely without moving the needle on organic results.

Moburst got thinking: “how can they use a limited budget to boost both paid and organic downloads, and crush clients’ KPIs?”

Using the logic above, they created a strategy that uses smart bursts of budget really effectively, landing the app in the Top 10 list for its specific category.

This then results in a ton of organic downloads, which makes that paid campaign even more effective, and so on.

Smarter, creative, and thinking out of the box. Perfect.

Keep Your Eyes on Your Goals

A key part of using your budget wisely is to focus on your goals. Unfortunately, some companies or marketing departments start with a budget and then look at their goals.

Switching this around – starting with goals or KPIs and then looking at your budget – is a lot more effective.

Although only a change of perspective, this kind of thinking forces you to make your budget work for you, rather than approaching it as something to be “used”.

This also brings in data and optimization elements, which are central to successful campaigns. Creating a hypothesis based on available data, making a calculated change, testing effectively, analyzing the results, making another change, and testing again.

Each time you’re getting better and more effective while using small amounts of budget to generate learnings that otherwise could cost literally millions of dollars.

So Are Bigger Budgets Always Better?

Much like a mythical precious sword, budgets are powerful – but it’s how you use them that counts. Is bigger always better when it comes to budgets?

Certainly not. What matters is how you deploy your budget, how you approach your campaigns, how you optimize, and how you measure yourself in relation to the goals you’ve set.

And hopefully, given these learnings, very soon you will have that perfect campaign in place, where bigger will indeed mean better.