An important concept about optimal budget usage, Budget Fluidity refers to the dynamic allocation of budget across inventories in real-time. This is especially important to how our programmatic buying of Connected TV, OTT, Display, Banner, Native or other Video inventory is done. That was a lot, so let’s break it down:
Example: Let’s say you’re advertising on Hulu, Paramount and ESPN, and you have $30,000 for your advertising strategy. How do you allocate those funds?
Fixed Budget Concept (ick)
Hulu may assign you a minimum budget of $15,000 – so you have to commit half your budget to Hulu Ads. Because we’re doing arbitrary budget allocation based on feelings, we’re going to split the remaining $15k, 50% each to Paramount and ESPN. You now have a $15k Hulu budget, $7.5k Paramount budget and $7.5k ESPN budget. You open a line of credit or generate invoices with each of those platforms and run your campaign.
What happens if you determine Paramount is working great, and some of the other budgets need to pivot to increase your Paramount strategy? You can’t. You locked in your budgets and probably can’t finagle your way into reallocation based on performance. If it’s even possible, it’s going to take days. That means you only had $7.5k of your budget doing great work, and the other $22.5k could have been used more effectively – and you wanted to – but it was already committed.
Fixed budgets that are immovable between inventories. These budgets are committed and inflexible.
Fluid Budget Concept (yay)
You have a singular media invoice with Levy Online, who has tremendous buying power across basically all inventory. We already have active buys with basically any network or ad platform imaginable, so you don’t actually need to commit inventory-specific budget. That’s already a win. But what’s next is even better:
We can dynamically shift budget in real-time. A critical concept is that we are actually targeting people or households who meet your audience criteria, the inventory (like Hulu, ESPN or Paramount) is only a means to reach that audience. So that $30k budget, that budget only gets dolled out to inventory when your target audience is watching it AND when our targeting systems think it’s cost-effective in real-time to place that ad, AND when our targeting system predicts it’s the right person or household to place the ad for. The budget allocation is dynamic and intelligent, not arbitrary and inflexible.
Budget fluidity means there is not a rigid budget commitment to a particular inventory type. Budget can move dynamically.
Levy Online does budget allocation based on performance, across inventory, in real time.
This is a critical concept that is beneficial to performance. Why? As more performance data comes into our platforms and Advertising Specialists for analysis, we need the ability to change where your advertising dollars are invested. The amount we vary the value of not just each inventory type, but each potential future impression, changes in real-time. Therefore, instead of committing budget to inventories, we reallocate dollars based on what inventory has earned it.