Budget Allocation & Bidding Strategy

Process

1. Collect budget and performance data across all active platforms
2. Read ../ads/references/budget-allocation.md for allocation framework
3. Read ../ads/references/bidding-strategies.md for strategy decision trees
4. Read ../ads/references/benchmarks.md for CPC/CPA benchmarks
5. Read ../ads/references/scoring-system.md for health score algorithm
6. Evaluate budget allocation, bidding strategy, and scaling readiness
7. Generate recommendations with kill list and scale list

Budget Allocation Framework

70/20/10 Rule

• 70% on proven channels (consistent ROAS/CPA targets met)
• 20% on scaling channels (showing promise, need more data)
• 10% on testing channels (new platforms, audiences, creatives)

Platform Selection Matrix

Budget Sufficiency Rules

Bidding Strategy Evaluation

Google Ads Bidding Decision Tree

Start
├─ <30 conversions/month?
│  └─ Use Maximize Clicks (cap CPC at benchmark)
│     └─ When >30 conv/month → Maximize Conversions
├─ 30-50 conversions/month?
│  └─ Use Maximize Conversions
│     └─ When stable CPA → Target CPA
├─ >50 conversions/month?
│  └─ Use Target CPA
│     └─ When revenue tracking → Target ROAS
└─ Revenue tracking active + >50 conv/month?
   └─ Use Target ROAS

Meta Ads Bidding

• Lowest Cost (default): best for volume, may have CPA variance
• Cost Cap: sets CPA ceiling, may reduce volume
• Bid Cap: maximum bid per auction, most control
• ROAS Goal: target return on ad spend
• CBO vs ABO: CBO for proven campaigns, ABO for testing

LinkedIn Bidding

• Cost Per Send (CPS): for Message Ads
• Maximum Delivery: for Sponsored Content (recommended)
• Manual CPC: for tight budget control
• Target Cost: for predictable CPA

TikTok Bidding

• Lowest Cost: maximize conversions within budget (volume)
• Cost Cap: set maximum CPA (efficiency)
• Bid Cap: maximum bid per impression
• Budget ≥50x CPA per ad group for learning phase exit

Microsoft Bidding

• Mirror Google strategy but bid 20-35% lower
• Enhanced CPC for manual campaigns
• Target CPA / Target ROAS for automated

Scaling Assessment

Ready to Scale (Green Light)

• CPA consistently below target for 2+ weeks
• ≥50 conversions per week (learning phase exited)
• CTR stable or improving
• ROAS above target
• No creative fatigue signals

20% Rule

Never increase budget by more than 20% at a time:

• Week 1: $100/day → $120/day
• Week 2: $120/day → $144/day
• Week 3: $144/day → $173/day
• Monitor 3-5 days after each increase for performance stability

Scaling Methods

1. Vertical: increase budget on winning campaigns (20% rule)
2. Horizontal: duplicate winning campaigns to new audiences
3. Platform expansion: add budget on new platforms
4. Geographic expansion: test new markets/regions
5. Format expansion: test new ad formats on same platform

Kill List Assessment

3x Kill Rule

• Any campaign/ad group with CPA >3x target → flag for pause
• Review spend in last 14 days with no conversions → flag for pause
• Creative with CTR >50% below platform benchmark → flag for creative kill

Kill Decision Framework

MER (Marketing Efficiency Ratio)

MER = Total Revenue / Total Marketing Spend

• Assess blended efficiency across all platforms
• Target MER varies by business: 3x-10x depending on margins
• Use MER to evaluate overall health, not just per-platform ROAS
• Incrementality testing recommended for MER accuracy

Output

Budget & Bidding Assessment

Budget Allocation Health

Allocation Strategy:  ████████░░  XX/100
Bidding Strategies:   ██████████  XX/100
Scaling Readiness:    ███████░░░  XX/100
Budget Sufficiency:   █████░░░░░  XX/100

Deliverables

• BUDGET-STRATEGY-REPORT.md — Full allocation and bidding analysis
• Current vs recommended budget split (pie chart data)
• Bidding strategy recommendations per platform/campaign
• Scale list: campaigns ready for more budget
• Kill list: campaigns/ad groups to pause immediately
• MER analysis and trend
• Quick Wins for immediate budget optimization