If you’re like most companies, your marketing budget is allocated based on what worked last year, what your competitors are doing, and what your team feels comfortable with. None of those are good reasons.

The right way to allocate budget is to start from business outcomes and work backwards. What’s the cost of acquiring a customer through each channel? Which channels are saturated and which are still underpriced? Where can you create asymmetric advantages by going against conventional wisdom?

Most companies are over-invested in channels that worked five years ago and under-invested in the ones that will define the next five.