How to split a marketing budget between traditional and digital

Key takeaways

To split a marketing budget between traditional and digital channels, start from results, not from labels. Put most of the money behind the channel with the best proven cost per customer, a smaller share behind a second channel, and keep a little back for tests.

• 70% on the channel that already brings customers.
• 20% on a second channel that shows promise.
• 10% on tests of something new.
• Review the split every quarter using cost per customer.

Is there a correct split?

No. Across the UK market, the Advertising Association and WARC report that more than four-fifths of advertising spend now goes to online formats, but that is an average of every advertiser. A mobile hairdresser and a software firm should not share a ratio. The correct split is the one your own tracking supports.

• Social media marketing vs traditional advertising: what works better for SMEs?
• Traditional vs digital marketing: where social media fits

What is the 70/20/10 working rule?

The 70/20/10 rule is a simple way to spread risk. About 70% goes to the channel that reliably brings customers, 20% to a second channel you are developing and 10% to experiments. It is a rule of thumb, not research, and its value is that it stops both complacency and gambling.

• The advertising channel scorecard: pick where to spend
• The minimum budget to test an advertising channel properly

What does a worked example look like?

Take an illustrative budget of £1,500 a month for a home improvement firm whose best channel is social media.

• £1,050: managed social media and paid social in its postcodes.
• £300: a leaflet drop every other month to its best streets.
• £150: a test, such as a local magazine or a new platform.

• Leaflets vs social media ads: which wins local customers?
• Social media budget for a UK small business

What if the budget is very small?

If the budget is under about £500 a month, do not split it. One channel funded properly beats three starved. For most small firms that channel is social media, because paid social has a practical floor of £300–£500 a month, alongside the free basics.

• Free advertising for small businesses: 12 ways that work
• How to advertise a new business: the first £1,000

How should brand and response be balanced?

Within the split, keep some activity that builds recognition and some that asks for a response. Research for the IPA by Binet and Field suggests roughly 60% brand and 40% activation for established advertisers. A small or new firm will usually lean further towards response until enquiries are steady.

• Brand building vs sales activation: the small business view

When should you move the balance?

Move the balance when the evidence moves. Shift money towards a channel when its cost per customer has been lower for two quarters. Shift away when a channel's cost has risen for two quarters and you have checked the advert itself is not the problem.

• A test beats the lead channel for two quarters.
• Prices rise sharply on one channel.
• Your audience or area changes.
• Capacity changes, up or down.

• Switching from print to social media without losing enquiries
• How to compare advertising ROI across online and offline

What are the risks of an all-digital or all-traditional split?

An all-digital split depends on platforms that change their rules and prices. An all-traditional split is hard to measure and slow to change. Holding one of each spreads the risk, as long as the second channel is funded enough to work.

• Pros and cons of social media marketing for small businesses
• Pros and cons of traditional advertising for small businesses

What does this look like in practice?

A pattern we see with small firms: the split is whatever was agreed last year plus anything a salesperson added since. Nobody chose it. Writing the current split down as percentages is often enough to show that the largest share is going to the channel with the least evidence behind it.

• See client work
• Social Media Marketing for UK businesses

Checklist: setting the split

• Total last year's spend by channel.
• Work out cost per customer for each.
• Rank the channels.
• Apply 70/20/10 to the ranking.
• Set a quarterly review date.

Next step

Write your current spend as percentages by channel. Then write beside each the cost per customer, or 'unknown'. Start with the unknowns.