How do I split budget across channels?
How much should each channel get? Most businesses try to solve this by splitting evenly — and an evenly split budget is usually insufficient everywhere. 🍰
Channel allocation is not a matter of taste. It is about where the demand already is and which stage the money feeds.
Short answer: satisfy existing demand first, then put what remains into creating demand. That is the order. 🎯
Related reading from the archive: building a channel mix · bidding on your brand.
Two kinds of advertising
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- Harvesting existing demand
- Creating demand
- Why you need both
The distinction decides everything. 🔀
Harvesting existing demand
Reaches people already searching, already decided. The return is fast and measurable. 🔍
Creating demand
Introduces the product to people not yet looking. The return is slow but expansive. 📣
Why you need both
Harvest only and your market never grows; create only and the till stays empty. ⚖️
The order of allocation
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- Tier 1: your brand search
- Tier 2: purchase intent
- Tier 3: retargeting
- Tier 4: new audiences
Four tiers, top to bottom. 🪜
Tier 1: your brand search
People searching your name are the cheapest and most profitable traffic; this tier is always fed. 🏷️
Tier 2: purchase intent
Searches for the product or service itself. While cost stays below the ceiling there is no limit. 🛒
Tier 3: retargeting
People who browsed but did not buy. A small budget gives high returns here. 🔁
Tier 4: new audiences
People who do not know you. What remains goes here; this is the growth budget. 🌱
How are the ratios set?
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- Feed to saturation
- Never skip upward
- A growth share
- A test share
No fixed ratio, but a rule. 📐
Feed to saturation
A tier is fed until its cost passes the ceiling. Then it stops; the logic sits in the budget guide. 🎯
Never skip upward
Money is not moved to a higher tier while a lower one is unsaturated. 🚫
A growth share
Part of the total goes to new audiences each month; without it a business consumes existing demand. 🌱
A test share
A small, fixed share funds new experiments. Tests are not run from leftovers. 🧪
Four common mistakes
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- Splitting evenly
- Starting a new channel large
- Reading channels in isolation
- Ignoring the season
All four burn budget. 🚧
Splitting evenly
The same money in every channel makes every channel equally weak. 🍰
Starting a new channel large
Big money in an unfamiliar channel means losing before learning. 📉
Reading channels in isolation
One channel may have prepared another’s sale; measurement sits in the attribution guide. 🔗
Ignoring the season
The same split applied every month means the peak is missed. 📅
When is it reallocated?
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- When a tier saturates
- When a new product launches
- When capacity changes
- Three months running
In four situations. 🔄
When a tier saturates
If cost hits the ceiling, money moves up a tier. 📈
When a new product launches
An unknown product needs demand creation, not harvesting. 📦
When capacity changes
Feeding demand you cannot serve is wasted money. 🏭
Three months running
If a tier exceeds the ceiling for three months, the problem is not the budget but the offer or the page. 🔍
What should I do today?
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- Step 1: list the tiers
- Step 2: write each tier’s cost
- Step 3: fill in order
- If you want help
Three steps, one hour. 🪜
Step 1: list the tiers
Brand, intent, retargeting, new audience. Four lines. 📋
Step 2: write each tier’s cost
Which is below the ceiling, which above? The decision follows from that. 🧮
Step 3: fill in order
Bottom to top; what remains goes to growth. 🌱
If you want help
Let us build your channel allocation: use the consult your expert form. For your current setup see the advertising digital audit; the whole sits on the advertising consulting page. 🎯
📝 Notes From the Field
A business split its budget evenly across four channels and got results from none. Once the tiers were built it became clear that brand search and intent traffic had never been saturated. The money was rearranged bottom to top. With no change to the total budget, sales rose in the same month.
📖 Short Glossary
Existing demand: people already searching and close to deciding. Demand creation: advertising aimed at people not yet looking. Saturation point: where a tier’s cost passes the ceiling. Test share: the small fixed budget set aside for experiments.
⚡ Quick Summary
Budgets are not split evenly, they are filled in order. 🍰 Brand search first, then purchase intent, then retargeting, and finally new audiences. Each tier is fed to its saturation point. Growth and test shares are fixed and allocated deliberately, not from what is left over.
🎯 Next Step
Let us build your channel allocation: use the consult your expert form. The increase decision sits in the increase guide; for your setup see the advertising digital audit.
Frequently Asked Questions
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Moving to demand creation before harvesting is saturated is like leaving one tap running and opening another. 🚰
In most cases yes, because competitors can appear on the same search and controlling the result is cheap. Where there is no competition and the result is entirely yours, it may not be necessary.
Not if the channel is deep enough and has not saturated. The risk is being left on one leg if that channel’s rules or costs change.
With the fixed test share, one objective and one message. Raising the budget before reaching the learning threshold means measuring coincidence rather than the channel.