How to Maximize Impact & ROI with Incremental Spend

Believe it or not, we’re already in the fourth quarter of the year. For marketers, this means looking at budgets and performance indicators and pinpointing what’s left to do, spend, or achieve before the year ends. Sound stressful? It is—but it’s also a great opportunity to take advantage of any incremental dollars or unallocated funds to spend strategically in Q4. 

Understanding incremental spend

“Incremental” is unallocated or additional budget/investment that can be used for the purpose of achieving specific goals, experimenting with new tactics, or measuring impact. Anything above a company’s planned budget for the year, or unused dollars within that budget, can be used for incremental spend. 

There are many reasons that a company might end up with unused budget. At the start of the year, media teams may earmark a certain amount of money to cover variable costs, such as the cost of running creative through the ad server—and this amount is usually overestimated to be safe. Brands also often reserve funds at the start of the year for long-term projects or marketing campaigns that don’t end up happening. And, as we all saw in 2020 during the pandemic, external factors and industry or world events can change the course of how brands spend their marketing dollars throughout the year.

When this happens, marketers are tasked with reallocating these dollars while maintaining performance. Unspent money might sound great, but in actuality marketers are often incentivized to spend the prior period’s budget in full to maintain the same dollar levels for the next year. Programmatic media buys are a strategic avenue for reallocating these unspent funds to continue to drive return on investment. 

Uses & benefits of incremental spend

Within any campaign, there is almost always an opportunity to spend incremental intelligently. Some of the most strategic budgeting techniques for incremental spend include:

Increase investment in what’s working

Using either a platform’s first-party reporting features or a third-party measurement partner’s results, you can see what tactics are working and maximize your presence there during one of the more competitive times of the year. This is especially easy to do with programmatic because nothing is bought on a guarantee and it’s scalable—the auction exchange format allows for flexibility and cost-efficiency.

Testing and learning

Everyone has that one test they’ve wanted to run but just didn’t have the funds at the time to try it, such as a new bespoke modeled audience or a test into CTV. Incremental spend is perfect for experimenting and trying out new channels, tactics, or partners to see what works. Then you can factor those results into the budget approach for the following year.

Measurement and surveys

Incremental spend can also be used to understand what’s working and what isn’t. To that end, it can be used to fund a survey to gauge performance for a past activation or invest in new measurement for Q4. Measure the success of past campaigns retroactively, or implement new incremental marketing campaigns in the holiday season to get insights that will fuel future campaigns.

Getting a headstart on creative

Creative isn’t a cheap line item, and it’s not always easy to update it on the fly. You can use incremental spend to expand your current message with new channels or start revamping your assets for next year. This is also a great opportunity to look back at the year, analyze what worked best, and optimize your current creative based on those results. 

Incremental spend for programmatic

The agility with which you can make changes and try new things in programmatic makes it ideal for your incremental spend. There’s no limit to who you can partner with, and any tweaks you want to make or marketing campaigns you want to launch can be implemented in as little as one or two days.

PulsePoint’s steady stream of new targeting tactics to test and learn is a great fit for incremental spend. Our flexibility alongside the ability to report results in real time enables brands to get creative with programmatic. We can offer easy access to vast scale across channels, performance measurement and optimization, and turnkey launches to expand reach and ensure cost-efficiency.

Programmatic allows for experimentation without high levels of risk, it can be customized and optimized based on your specific KPIs, and it can set you up to be even more successful in the following year.

Takeaways

As we get close to the end of the year, and the final months to spend budgets in full, now is the perfect time to use incremental spend and either increase investment in what’s working or experiment with something new. By taking advantage of incremental dollars and analyzing the results, businesses can try new tactics or channels, make data-driven decisions about their marketing budgets, and optimize their efforts to achieve better performance and return on investment in the coming year.

Head spinning over unused budget? Contact us at PulsePoint today to get the most out of your unallocated funds or incremental spend.