How do agile budget allocation models differ from traditional models?

1 What are traditional budget allocation models?

Traditional budget allocation models are typically based on historical data, assumptions, and forecasts, and are designed to align with the overall business strategy and goals. They usually involve setting a fixed budget for a specific period of time, such as a year or a quarter, and allocating it across different marketing channels, campaigns, and activities according to predetermined criteria, such as expected return on investment (ROI), target audience, or strategic priority. Traditional budget allocation models are often rigid and inflexible, as they do not allow for much experimentation, innovation, or adjustment based on real-time feedback or market changes.

3 What are the benefits of agile budget allocation models?

Agile budget allocation models can offer a number of advantages for marketers, such as improved efficiency and effectiveness. By focusing on the most profitable and promising channels, campaigns and activities, marketers can avoid wasting money on underperforming or irrelevant ones. Additionally, this model enables marketers to be more agile and responsive to the changing needs and opportunities of the market. They can quickly adjust their budgets in response to customer feedback, competitor actions, or environmental factors. Lastly, this model can help marketers boost creativity and innovation by experimenting with new channels, campaigns and activities to reach and engage their target audience.

5 How to implement agile budget allocation models?

Implementing agile budget allocation models is not a simple or straightforward task, as it requires a significant shift in mindset, culture, and practice. However, marketers can follow some general steps to achieve this. First, they should define the objectives and KPIs of the marketing strategy and budget, and align them with the overall business strategy and goals. After establishing a baseline budget based on the available resources and the expected outcomes, it should be allocated across different channels, campaigns, and activities according to their initial priority and potential. Then, marketers should monitor and measure the performance and results of the different channels, campaigns, and activities, collecting data and feedback from customers, competitors, and market trends. This data should be used to evaluate and compare the performance of each channel, campaign, or activity in order to identify best practices, opportunities, and challenges. Finally, the budget should be reallocated and optimized based on the findings from the evaluation process. This cycle should be repeated on a regular basis in order to adapt to changing needs and opportunities in the market.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?