In today’s business climate of “are we / aren’t we in a recession?” ad spend tracking is more important than ever.
After all, how can you determine your return on ad spend or even seek to make your spend more efficient when you aren’t accurately tracking it?
Maybe we’re getting ahead of ourselves, though. So let’s step back, define what we mean by ad spend tracking, and then break down how you can utilize it to help your marketing team navigate turbulent economic times.
What is ad spend tracking?
Ad spend tracking is the process of analyzing how much money you’ve spent for a given period versus how much you’ve budgeted.
For digital marketers with large budgets and many ad platforms, ad spend tracking can be a daunting task. Also, as we have written about before, the digital marketing space has gone through some major upheaval over the past several years. Most advertising platforms are becoming “black boxes,” limiting the fine-tuning levers a performance marketer can pull on.
The result is a platform that provides a set-it-and-forget-it campaign management style. You provide the platform with your budget, goals, and creatives — and then you’re expected to sit back and let the algorithm do its thing.
Sometimes that’s not so great
The problem with this approach for many digital marketers is that, in some cases, the platforms (or, rather, the algorithm) can exceed your budget while chasing those conversion goals.
Plus, if you’re advertising across multiple platforms (like most marketers), budgets can shift across those platforms during the year. For instance, you might want to shift your advertising spend away from TikTok and into Instagram. While performing that bit of budget juggling, you might forget to adjust your in-platform spending limits accordingly.
While a little overage here or there might be overlooked when cash is flowing and times are good, sooner or later, you’ll need to stick to your set budget. Or risk that the budget (and your job) get cut.
It’s not all doom and gloom, though. Read on to learn about three ways to accurately track your ad spend to ensure your ad campaigns run smoothly while the budget is spent wisely.
1. Using spreadsheets to monitor ad spend
Let’s start with tools you are familiar with: Excel and Google Sheets.
Most marketers regularly use one of these tools (or another similar competitor). That means you may know your way around the basic functions and formulas, which is great.
Divide the ad spend across time
First, you must divide your annual budget into monthly, weekly, and daily limits. When doing so, be sure to account for things like seasonality. In other words, don’t blow all your budget in the spring when you register most of your sales around Black Friday. And don’t simply divide your budget by 12, 52, and 365, either.
This may take you a couple of tries to fine-tune the spending until you’re comfortable.
Add this data to a sheet
Once you’re happy with the match, which accounts for known changes in the demand for your goods or services, add those limits to your spreadsheet.
Import the actual spend
The next step in this process is to import your actual spend data into your sheet. You must manually copy/paste it once the period (week, month, or quarter) ends.
We all know that data in a spreadsheet can be difficult to interpret. That’s why you’ll want to visualize it in a graph or other chart. This will let you quickly understand if you’ve been able to stay under budget, go over budget, or hit the budget dead on.
The downsides to this method are that it requires manual work and can only be performed retroactively. That is, you have to wait for the period to end before you can track actual versus budgeted spend. Additionally, this can become chaotic if you run ads across multiple platforms with different spending limits.
2. Google Ads’ built-in budget management tool
Understanding that the manual spreadsheet-based approach was a bit limiting due to its retroactive nature, Google cleverly developed a tool to help you become a bit more proactive. The budget management tool allows you to plan spend by week, month, quarter, or year.
Then, the system visualizes your advertising spend with estimated projections of future budget use, budget pacing, and an allocation table. Wow, that’s like built-in ad spend tracking.
The only problem is that it only tracks your ad spend within the Google Ads universe. It won’t consider your spending on other platforms, so you may have to supplement this tool with the manual approach.
3. A marketing data hub like Funnel
Here to save the day!
Funnel has many built-in tools and features that can help you with ad spend tracking, mainly when working with a lot of data across multiple platforms. Take the data explorer, for example.
Funnel’s data explorer is a primary data visualization tool within Funnel itself. It allows you to add several dimensions and metrics to a table for quick, ad hoc analysis.
Many of our teams at Funnel find this feature particularly useful. It allows them to quickly chop, change, and compare data to get a quick sense of how our efforts are performing. You need a few clicks and seconds to let it work its magic.
It also automatically maps the data, which is particularly useful if you’re trying to track ad spend across multiple ad platforms. No need to worry about converting Facebook’s “amount spent” to Google’s “cost.”
However, this tool works best for quick ad hoc analysis. You will likely still want to share your connected and organized cross-platform ad spend data to a robust visualization tool like Looker or Tableau.
Putting it all together
Let’s say you’re running a digital marketing campaign for some new sneakers. They are amazing. You know they’re sure to fly off the shelves (or the online shelves, anyway). You just need to get the word out there.
First, you receive your digital ad budget from your CMO. Great! We have a total budget of $10 million to spend across the major markets in the US (think: New York, Chicago, Los Angeles, etc.).
The sneakers don’t drop until early August to coincide with the back-to-school season. After all, these sneakers are designed by a famous musician and targeted at young adults in high school and college—time to divide up that budget on the calendar.
Allocate budget according to seasonality and demand
You’ll likely keep pretty quiet in the early part of the year. However, you should probably allocate some budget around late spring and early summer to drive hype. This can also coincide with the musician dropping a new album (song of the summer hopes) around that time. The budget will then increase over the summer months, with a peak around the launch date. It may then decrease slightly, with a renewed ad spend around the holidays.
To reach your audience, you decide to advertise on Google Ads, Instagram, TikTok, and Facebook. While Google Ads boasts its budget manager feature, it will be isolated to that specific platform. To perform ad spend tracking across all platforms, you’ll connect and organize all of the data with Funnel and share it with Looker to create an easy-to-read dashboard. You’ll also want to add some actual-versus-target logic that will serve as alerts when you approach your allocated daily, weekly, and monthly budget limits.
Boom, ad spend tracking done.
The actual impact of ad spend tracking
Ok, ad spend tracking isn’t too complicated of a subject matter, and while implementing these sorts of budget pacing trackers across multiple platforms can be tricky, Funnel can make it easier. But there is something else that ad spend tracking does for you: it can make your organization run much more smoothly.
As we mentioned above, executive leadership is especially sensitive to unforeseen additional spending due to the uncertainty in the economy right now. Efficiency is the global buzzword right now, and every cent matters.
By ensuring that the costs of your digital advertising stay within its boundaries, you contribute to the overall success of the marketing team.
Don’t forget about finance
Additionally, you can make the relationship between finance and marketing much smoother. How?
Every month, all your selected ad platforms will send invoices to your accounts payable team. They may need to ask you if these costs are accurate according to the set budget. If there are overages, or you are unsure, you can expect a rocky relationship to develop there.
However, since you followed the steps above, you can provide a clean and accurate report to the finance team regularly. That means they can simply open the dashboard to ensure all the invoices are accurate — avoiding the endless back and forth over your internal messaging service.
Why ad spend tracking is so important
For every marketer (and especially digital marketers with large budgets), ad spend tracking is a critical process we must all undertake. It is essential to monitor performance and efficiency and will ensure you don't exceed your monthly budget.
And while some aspects can be automated, we must all habitually track our actual spend versus budgeted spend regularly. This can help us live up to leadership’s expectations, make cross-organization relationships smoother, and make us better at what we do.