Media planning, the Achilles’ heel of the sector

Iván Hernández

18 July 2023

media planing

Let’s be honest: budget allocation among different digital channels often becomes a repetitive task based on intuition and limited concrete data. This is largely due to the challenge of accurately tracking the results of our campaigns across all the advertising platforms we use.

We have previously discussed how attribution models help us overcome this difficulty by providing information about all the advertising touchpoints a user encounters before making a purchase, and determining their relative importance in the conversion process.

data driven decisions media planning

However, these models have three main downsides:

  1. They have a high cost.
  2. They involve multiple different departments during their implementation, often resulting in vague plans or conflicting interests.
  3. They are medium to long-term projects that require patience and persistence.

Let’s assume that we cannot implement a data-driven attribution model in our company. How can marketing departments create or validate optimal media plans?

The answer is simple, but the implementation is not as straightforward. Here are five actionable steps you can take to optimise your media planning.


Calculate the optimal spend per customer.

Calculating the Customer Lifetime Value (CLV) is essential for effective media planning aimed at generating sales. We need to know how much revenue each user will generate for us, even before attempting to target them in the channels they frequent.

Why is this so important? Firstly, because it directly affects the profitability of our marketing efforts and, consequently, the profit we will achieve. Another significant reason is that worldwide, users are increasingly spending more on online purchases, and we can’t afford to miss out on this opportunity. If we don’t direct our efforts towards the right users in the channels they inhabit, our competition will, and we will lose a significant amount of revenue.

Retail e-commerce sales worldwide from 2014 to 2026 (source: Statista)

On this occasion, we won’t delve too deeply into the calculation of LTV, but we would like to emphasise the importance of having well-organised and structured customer data, which will allow us to create our own RFM models (Recency, Frequency, Monetary Value).

Once we know the LTV of a customer, we can establish the maximum CPA (cost per acquisition) that we are willing to pay. This, in turn, enables us to select the media channels that are of interest and those that are not, based on the CPA they return.


Provide context for the campaigns’ ROAS.

The second aspect (although not necessarily in order of priority) that we must consider when it comes to media planning is the ROAS (Return On Advertising Spend), which represents the performance of advertising investment.

ROAS allows us to assess the profitability of our advertising channels, by analysing the relationship between the investment made in each channel and the sales revenue they generate.

However, it is important to note that this approach does not provide us with a long-term view, but rather offers immediate or short-term data. Therefore, if we rely solely on this metric, we run the risk of focusing on channels that are effective for mass acquisition but not as efficient in attracting loyal customers with higher purchase frequency.

Despite this, ROAS remains the most commonly used criterion when making decisions regarding budget allocation. Perhaps for this reason, advertising investment in SEM (search engine marketing) is experiencing the highest growth in absolute terms. As it is based on more transactional search terms that imply a direct purchasing intent from users, it is often identified as one of the advertising types with the highest return on investment. However, this may change in the near future with the new paradigm of search.

Digital Advertising - Ad Spending by segment in the United States (source: Statista)

Beyond its short-term perspective, the main drawback of ROAS is that it only measures revenue, not profits. In other words, our campaigns may be generating a positive ROAS (for example, earning 5 euros for every euro invested), but the overall profit may still be negative due to other costs such as production, inventory, shipping, etc.

Therefore, it is critical that ROAS is not the sole metric used when approaching digital media planning.


Consider all scenarios to mitigate risks.

When it comes to media planning, one of the main challenges is dealing with uncertainty and addressing the risks associated with the decisions we make. We cannot predict with precision how each channel, competitor, or audience will react to our campaigns. That’s why it’s important to consider different possible scenarios and be prepared to adapt to them.

One way to do this is by using the three-point estimation technique, which involves establishing three values for the budget:

  1. The best case, the most optimistic scenario. We expect to achieve the highest performance with the lowest possible expenditure. We will be highly positive in our growth estimations.
  2. The most likely case is the most realistic. In this scenario, the ROAS will be in line with the industry average. Therefore, we will not make estimations that deviate from how the market has been performing to date.
  3. The worst case, the most pessimistic scenario. The scenario we never want to see, where the ROAS, although positive, generates a very high advertising expenditure.

Once we have the ROAS estimation and budgets for each case, we will calculate the weighted average value. This will allow us to understand the range within which each channel could operate under different circumstances.

By doing so, we can have a broader and more flexible view of the budget, increasing or decreasing it up to the predefined maximum or minimum as we observe the campaign results.


Continuously update your audiences.

In media planning, one of the most common mistakes is focusing on channels rather than audiences. Before deciding which media to advertise on and with what budget, it is crucial to thoroughly understand our buyer personas and their consumption habits.

Platforms like Statista and its Consumer Insights tool can assist us in this research, allowing us to create user profiles and understand their behaviour both in the digital and offline realms. For example, we can extract data such as online purchasing drivers based on users’ education level. This information is highly relevant if we aim to integrate a Social Shopping strategy into our planning.

Users' motivations to recommend brands online

Once we have understood our target, analysed their motivations, purchase drivers and the channels where they are present or consume content, other criteria such as ROAS and LTV will come into play. 

However, we must bear in mind that, just as we optimise our media investment through more technical aspects, such as bidding, audience building is not a one-off task: just as new channels that our target use frequently emerge, we must continuously study our users, as their consumption trends may vary and this needs to be reflected in our strategy.


Leverage different formats and messages.

Along with audiences, formats are the other forgotten aspect of media planning. However, they are fundamental for three main reasons: 

  • Updating platforms. Quite frequently, media platforms such as Meta, Google and Amazon make new advertising solutions available to advertisers. These often respond to a need identified by the platform that the existing formats did not quite meet. Advertisers who spend time testing these new formats will have a competitive advantage. 
  • Performance based on the campaign’s objective. Not all ad formats work well for every marketing objective. For example, there are many success stories where Google advertisers have improved their results by replacing static content with video. However, for some objectives, we will not be able to determine with certainty which formats will perform better. In these cases, while historical account data can help us draw conclusions, we should be aware that there may be budget variation depending on the performance of the format. 
  • User experience. In some cases, after having launched the campaign, the user’s interaction with the ad, format or platform that was initially planned may not meet our expectations, and the anticipated results may not be achieved. In this situation, the strategy must be flexible enough to execute the change to another format or even another platform.

Analysing, deciding, and evaluating the best formats for your campaigns is key to the success of your advertising strategy. If we overlook their importance, we run the risk of missing out on opportunities such as maintaining a competitive advantage, optimising results, and adapting to the preferences of our target audience.


Preparation and flexibility are not mutually exclusive.

If you have come this far, you will agree that media planning is much further from intuition than it seems.  It involves using external tools and sources such as studies and panels to gather crucial information, as well as insights from past experiences, to answer our questions. 

Only in this way, based on data and performance, can we create strategies free from cognitive bias known as the false consensus effect, which leads us to think that what we do as individuals (e.g. digital users) is what other people like us do.

However, we must not forget that this precision in our method must be accompanied by flexibility in execution. As we mentioned, during the optimisation process, we may discover new information that will lead us to adjust the investment we had planned for a channel. Budgets need to be flexible once the campaigns have begun. Nowadays, amidst the whirlwind of changes in digital platforms, we would be at a disadvantage if we were not prepared to vary the investment in each channel as the campaign progresses.

Despite the current competitive digital environment, you don’t have to face the complexity of media planning alone. At Good Rebels we are ready to help you optimise your campaigns, connect with your target audience and achieve your objectives. So, are you ready to take your digital strategy to the next level?