The Importance Of Diversifying Your Ad Spend

Today's customers use different platforms for different reasons. To be successful, you need to leverage the strengths of each platform and be present where it makes the most sense for your brand.

Imagine someone tells you to make your entire business depend on how your neighbor is feeling on any given day. If they’re feeling happy, you will make more money. If they’re feeling sad, you’ll make less money. And if they decide to make changes to how they want to live their life and act around you, then your entire business has to adapt or shut down.

That sounds nuts. No one would agree to that.

Yet I see many companies do just that: they make one advertising platform – typically either Google or Facebook Ads – the sole moneymaker for their entire business. All of their advertising budget goes to one platform. All of their images and videos are produced for that platform. All of their sales come from the same type of people from a single channel.

Why you need to diversify your ad spend across platforms

When you do this, you’re building a business by putting all of your eggs in one basket.

This might be okay when you’re just starting out. But once your business grows, expenses increase and you are responsible for a team of employees, placing all your bets on the same horse is not only risky – it can be detrimental to your whole company.


What happens when it goes wrong

Let me start by saying that this applies to any type of company and sales channel. We worked with an Amazon seller who makes millions in revenue on Amazon every month. Suddenly, Amazon banned more than 200 product listings. They had made changes to their policies and the seller’s product descriptions were no longer compliant. For almost 4 weeks, his business stopped generating any revenue.

Similarly, we worked with an ecommerce brand whose primary source of revenue was Facebook and Instagram ads. They were spending well over $4,000 a day on Facebook Ads when suddenly, Facebook quietly made changes to ad delivery. The company’s revenue took a big hit and their marketing team was scrambling to find a winning campaign again.

Apart from decreasing your dependence on one sales channel, here are more reasons why you should consider diversifying your ad strategy.

1. Advertising Platforms are always changing

Evolution of Facebook CPM and CPC cost over time
Source: Socialinsider data, January 2019 – August 2020

In September 2020, Google announced that they were no longer going to report on ‘low-volume search terms’. For advertisers, this basically means that about 30% of their ad spend is now unaccounted for, because Google only shows the keywords you spent money on once they reach a certain threshold.

Google, Facebook, Amazon & Co have a long history of making changes to policies, ad settings and ad delivery. Long-time advertisers know that they need to continually adapt to smaller and bigger platform changes. These giants are going to keep making changes to their platforms, regardless of how much this might affect your company.

As you advertise, you may also notice that advertising costs on any platform increase as the ad platform matures. A great return on your investment may diminish as more and more advertisers start competing for your target audience’s attention in the same ad spaces.

2. Your audience doesn’t live on one channel and neither should you

Today’s customers use different platforms for different reasons.

On social media, your audience has a large amount of choices for where to spend their time. They might use Facebook only for Facebook Groups, Instagram to share all of their photos and stories, and use Pinterest for their hobbies and passions.

To be successful, you need to leverage the strengths of each platform and be present where it makes the most sense for your brand.

You also need to consider that the typical customer journey spans across platforms. On every channel, you can target users at the top, middle and bottom of your sales funnel with ads that are specifically tailored to their current situation.

3. You develop tunnel vision

When you focus all of your ad spend on a single platform, all of your marketing becomes focused on that platform as well. Your marketing decisions, the content and imagery you produce, your advertising formats – all that hinges on the main platform you choose to advertise on.

Imagine developing all of your marketing collateral for Facebook and Instagram ads. When your performance suddenly drops, you now have to scramble to adapt your marketing material to Pinterest, Snapchat or YouTube to keep revenue stable.

How to start diversifying your ad spend

All these may sound like a non-issue. Until you find yourself in the situation of having to adapt to a new channel in a time of crisis, i.e. when revenue has dropped and it’s already too late.

So what can you do to avoid these pitfalls? Here are a few tips to help you get started.

1. Use the 80/20 rule

If you’re already successful on an advertising channel and are enjoying a steady stream of revenue from it, that’s great. Instead of sitting back and relaxing, you can take a part of your budget and start exploring the possibility of marketing on other platforms.

The 80/20 rule is always a good place to start. Use 80% of your budget toward your ‘winning’ platform, and 20% to work on expanding your brand on other channels. You may discover a hidden gold mine once you start to gain traction elsewhere.

2. Start remarketing first

A clever way to familiarize yourself or your marketing team with any platform is to start by doing remarketing on it first. This allows you to get a feel for the creatives, formats and wording you are expected to use on the new channel. You’ll also be able to gauge what levels of return you can expect there and how quickly you can get up and running.

A prerequisite for this is to make sure you have warm audiences that you can remarket to. If you don’t have remarketing tags installed from platforms other than your ‘main’ channel, you better get on it! Sign up for an advertiser account and install their remarketing tags on your website. You never know when they’ll come in handy and you’ll be happy you thought of it in advance.

As always: make sure to stay in accordance with any applicable data privacy and cookie policies when you install remarketing tags.

3. Get outside help

If you and your team are too busy to start learning a new ad platform, or you want your campaigns to start producing results faster, you may want to consider hiring an expert. An agency that specializes on the platform you’re trying to master can help you get set up and start seeing results much faster than you may be able to. They already know all the tricks, best practices and strategies to achieve a higher return on ad spend. Plus, the cost of outsourcing will probably be lower than the amount of ‘learning money’ you would have spent trying to get used to the new channel and become successful on it.

Grow your brand ‘responsibly’

For many marketers or brand owners reading this, it may not be an overnight decision. I get that. But as you continue to grow your business using the tactics that currently work for you, don’t forget to keep an eye out for other options.

The best time to work on new ways of marketing is while you’re still successful on one platform. Start developing your other channels, be it content, email, or a new advertising platform. Reduce your dependence on any one company to make sure that your business can quickly recover should anything ever change.

Picture of Ruba Aramouny

Ruba Aramouny

As the founder and strategic director of Solid Marketing, Ruba helps companies of all sizes integrate PPC advertising and Email automation into their digital strategy for brand promotion, demand generation, and customer acquisition. Her clients include Fortune 500 corporations from the consumer goods and retail space, as well as industry-leading E-commerce and SaaS businesses.