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Thank you, Lauren. And hello, everyone. Welcome to this third episode of our heavy metal podcast. It's your one way ticket to midnight, cutting through the heavy meta noise. My name is Dean Smith. I'm the founder at Base Camp Metal, where we focus on educational content surrounding medicine, which, as well as medicine marketing dot com, where we focus on running the campaigns. So today we're going to talk about budgeting for meta. And how do we create a budget with historical data that has been thrown completely out of whack? Historically, you know, when we put together a budget we think about, well, what did we do last year? Even as we sit right here in 2020 we think about what we did this year, and we quickly realized that that is useless at best. Uh, even last year's data useless because everything has been thrown completely out of whack. And so the first thing when we start thinking about our budgets for 2021 that comes into play, it actually goes back. If you haven't already listened it to it, go back and listen to podcast number two, which was about setting our goals. The reason I say that is because our goals dictate our path and our path dictates our budget. We have to understand what it is that we're trying to accomplish to understand what kind of a budget we need in order to accomplish. It s oh, that is so very important. But having said that, we are going to give some advice on your budgets. And really, it comes down to one of three approaches when we talk about medicine, which we'll talk about the pros and cons for each of these, and the first one is an uncapped budget. What are the advantages and disadvantages? What if you have no budget at all? Yeah, that can actually be done. And it pros and cons of that, as well as the somewhere in between model and where we see pros and cons for that model. So let's start by talking about that uncapped budget. Yeah, that's a real thing. And here's one of the reasons that that could be an advantage to you. If we think about our cost of sale from medicine search, it should be lower than what we're getting from the online travel agencies. If you're a big Brandon Hotel. Maybe you're ot A Commissions are as low as 12%. Probably closer to 15 on. If you're an independent hotel, you're probably upwards towards 18, maybe even 20% commission. You're paying to the U. T. A s. Okay, so if my medicine cost of sale is, let's say 12% that is obviously significantly significantly lower. And if we are shutting off our medicines campaigns, we have to remember something that's unique about medicine, which shutting off your medicine campaign does not stop medicines. Traffic for your hotel. It just stops that traffic from coming to you. There are plenty of online travel agents that are ready and willing to fill in the void that you've left behind by not being present on there. You go into trav ago kayak Google being any of these. Look up your hotel. If you're not there, somebody else most definitely is on dso. Those will keep on running. So by shutting off your campaign, all that you've really done is said You know what? I don't want to get that reservation at 12% cost of sale. I would rather let somebody else book it not give me any of the the customer's data, and I pay them more. Why would I do that? So, philosophically speaking, I should never turn off my medicines campaign now. Obviously, if you are having a cost of sale that is higher than what you see from the online travel agents, that's a different story. Now we have to take a closer look at that, though, and better understand why you're getting such a higher cost of, say, off of that. And maybe we need to better optimized the campaign because it should not be. There are exceptions to that, and there are times when, yes, it might b'more practical toe Let a notebook it. But those are few and far between, so those are the advantages disadvantage. Well, unfortunately, this this thing we call reality and in the real world, unfortunately, we have marketing budgets on. We usually have to adhere to those no matter what it is working with, and so we probably have something we have to put into place. Now I've seen cases where there was an uncapped marketing budget as long as you were getting a set return. So, for example, if I was getting a 9 to 1 return on my campaign, you could keep on funding the budget and we keep on cycling back to itself. So that's another way to think about that. But, yes, we do have budgets in marketing. That's just a fact of life. So now let's jump to the other extreme where I don't have a budget. In fact, I have no idea how it could possibly fund this coming into 2021. All right, so then we get into these programs that we saw a lot of the medicines channels including Google, especially start to really talk about this year s Covic set in. I say start to talk about the reason I say that is because things aren't actually knew. Uh, these types of programs have actually been around for many years now. They've been a little bit more accessible for a brand carrying a big stick, with 1000 hotels coming into play versus an individual standalone property. But the programs have definitely been there. They've changed terms a little bit over the years, and they started off being called a C P A. Or cost per acquisition. Uh, then Google in particular actually change some of their Burbage toe, where they would have a C p A model and they would have a commission model. And those were two very different things. And we had to make sure we understood that, Uh, today, they referred to it as a paper stay model or paper booking, which are basically those two same terms changed for in a matter that's better to understand. So paper stay is a consumed reservation. Paper booking is you're paying on the booking, not net of the cancelations. Eso papers state. They have actually been there in state of the hotel, so those are really good options. When you don't have a budget right there, there's no excuse not to be in there. You just gotta get your rates and availability connected in. There s so it's a fairly easy way of getting plugged in. That's the advantage to it. You don't have to have a marketing budget. The disadvantage is that you also don't get any control over it. So it's kind of a get what you get. And don't throw a fit. As I used to say to my kid, uh, you really just kind of have to be happy with whatever you're getting out of it and don't have any control now, I say that you don't have to have a marketing budget. That's not to say that there is no cost to it. But the cost is usually now no longer in your marketing department. It's Mawr in your distribution, uh, intellect and delivery department. So it kind of changes the budgets a little bit. But what I mean by that is you still have to get your rates out there. Uh, there may still be a cost per booking. If you have a your booking engine charges a fee per booking. Different scenarios like that that could still have cost involved. So I'm not going to say that it's free, but it does change the way you're setting up the budget, Okay? And then So finally, let's talk about this somewhere in between model and and pros and cons of that. And when we talk about somewhere in between, I'm talking about a scenario where, okay, I do have a budget, but it's definitely not uncapped eso Like I said earlier. One example of that is where I hit a certain return on my ad spin, and I can keep on funding the program. So that's another example. But more common scenario is where I've got a fixed budget that I have to stay within. But at least I do have one, right? So now we have to start thinking about it in terms of where do I put that budget and how do I spend that? And how do I make sure I don't overspend that? Because by the way, it can blow out in a hurry. I'm gonna cite an example. Actually, it's goes back. Thio, I want to say to 4 2014 if memory serves me right and I was running a medicine campaign for a client and Britney Spears announced that she was going to perform at the Billboard Music Awards that year. Who cares, Right? Generally speaking, that should have no impact on my medicines campaign whatsoever. It did, uh, Britney Spears at the time had residency at this particular hotel in Las Vegas, and their clicks on trip advisor specifically skyrocketed that specific day. And I'll never forget that, because it was one of those things that we didn't see coming. We didn't have, uh, controls set in place to cap those and clamp down on it if something skyrocketed like that and it just blew their clicks out of the water. So one of those things lesson learned right so things can happen. I do recommend having daily budgets in place. Now there. There's a pro and a con to that as well if you have a daily budget in place, in fact, let let's say you have a monthly budget in place. Even let's say it's, ah $1000 that you have budgeted for the month. Let's say that theoretically, you could have received $2000 worth of clicks Well, in order to take that $1000 and spread it across that month evenly. That means that somewhere whether it be at the end of the month, the end of the day, the end of the week, whatever the case may be. Somewhere during the course of that month, you have to go dark. If you could have gotten those $2000 worth of clicks and you only had a budget for 1000 somewhere, we've got to set you off and you're not going to then get the clicks coming for that, so I will tell you that that works nice to some degree because most of your brands in particular have a corporate budget you're working with. That budget has to last for the month, right? I can't run out of that budget on the 20th of the month or 25th. I've got to be able to spread it out, so that's completely understandable. Uh, but if you're wanting to make sure that your present during all that time, you may have to change your strategy a little bit again, this comes back to understanding what your goals are. Because now that budget may not be conducive to a goal of wanting to be in the top spot invisible every time you may have to say Okay, in order for me to make that budget last, I'm going to have to drop my position a little bit and skill that down again. Talking about goals. We also have to understand how that position that we're in impacts our cost of sale, right? So being in the number one spot is a more expensive cost per click. That's a no brainer, right? Being in the number 345 spot is going to be a lower cost per click. You're gonna lose some click through rate in between those so you lose some traffic. Your conversion rates theoretically are fairly consistent between them, although there are some variations Will save that for another episode. Uh, but if you