A digital marketing manager for a large retailer manages a fully flexible budget for their campaigns.Which best practice should they follow in order to maximize results from their flexible budget?

For a digital marketing manager with a fully flexible budget aiming to maximize results, leveraging automation and strategic budget allocation is crucial.

Analysis of Correct Answer(s)

• Use shared budgets and portfolio bid strategies to maximize campaign flexibility and allow AI to do its work.
  • Shared Budgets: This allows multiple campaigns to draw from a single, larger budget pool, which is the epitome of flexibility. If one campaign performs exceptionally well, it can automatically utilize more budget from the shared pool without being constrained by individual campaign caps. This prevents missed opportunities and ensures budget is allocated where it yields the best return.
  • Portfolio Bid Strategies: These are often AI-driven and optimize bidding across multiple campaigns or ad groups collectively to achieve a specific goal (e.g., maximize conversions, hit a target ROAS/CPA). By applying a strategy across a portfolio, the AI can make smarter, cross-campaign decisions, effectively distributing the shared budget to maximize overall results based on real-time performance and market signals. This approach directly aligns with allowing AI to "do its work" and optimize a flexible budget for maximum impact.

Analysis of Incorrect Options

• Adjust performance targets monthly or quarterly to optimize AI-driven solutions.

  • While adjusting targets is part of optimization, a monthly or quarterly review cycle can be too slow for a fully flexible budget designed to maximize results in dynamic digital marketing environments. AI benefits from continuous learning and more frequent, data-driven adjustments to truly maximize potential. This option focuses on target setting rather than budget mechanics.

• Cap budgets at the average daily spend to eliminate unnecessary budget usage during seasonal periods.

  • This practice directly contradicts the goal of a flexible budget and maximizing results. Capping budgets at an average level during seasonal periods would severely restrict the ability to scale up and capture increased demand or capitalize on high-performing campaigns. A flexible budget should allow for expansion during peak performance, not limitation, to truly maximize results.

• Create a separate budget for campaign experiments and unforeseen market changes.

  • While having funds for experiments is good, creating a separate fixed budget for unforeseen changes goes against the spirit of a fully flexible budget. A truly flexible budget should be able to adapt to market changes or fund experiments from its main pool as needed, rather than segmenting funds into rigid, separate allocations. Shared budgets offer superior flexibility by allowing dynamic reallocation across all campaigns and initiatives.