The Optimal Media Budget Per Channel

We often get asked by prospective online brokerage clients what the optimal media spend is per channel and we usually answer that it depends on target country, name recognition currently, goals for the marketing plan and the brokers’ positioning. However, there are some general points to be made on this.

First lets start by talking about a recent research project by Scottrade and Google. In this research project (which is perhaps not the most advanced one we have seen) Google set out to find an optimal marketing mix for the online equity trading company that had traditionally been focussed on display advertising as the mainstay of it’s program. When it analysed the traffic that was coming to the website and converting, it was found that TV and Display drove a large percentage of the search traffic and as such in order to drive optimum demand according to their models they recommended that 28% go to search, 33% to TV and 39% to display.

Now, Scottrade is marketing a product that is certainly a lot more mainstream then anything traded on margin and as such it makes sense to make TV such a large part of the media spend. Furthermore, as companies that sell products on margin will not benefit from the brand recognition and reach of TV at the right price in most cases (certainly not in more expensive media markets) it makes sense to keep the TV advertising to financial channels such as Bloomberg TV and CNBC only in all but the highest budget marketing plans.

Besides Search, Display and TV there is of course also Print and Outdoor to consider. While there are some relevant print and outdoor placements in most cases it makes most sense to concentrate on online channels. In terms of percentages, we would recommend as a guideline to larger brokerages to spend 40% on Display & Video, 40% on Search, 15% on TV and 5% on print. As said, this is very dependent on goals and target market so be sure to reach out if you would like a recommendation for your specific situation.

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