Channel Portfolio Allocator
Channels are a portfolio, not a favorite. Enter your goal, budget, and growth stage, and this splits the money across the mix — then reads how concentrated that mix is, so you can trade efficiency against resilience on purpose.
The channel question comes last, and it’s a portfolio question: each channel does a different job, and each earns its slot by clearing payback against your goal. This allocator starts from base weights for your goal, shifts them by growth stage and business model, and lets you concentrate for efficiency or diversify for resilience — then flags any slice too thin to reach efficient scale. It’s an illustrative starting point for the plan, not a substitute for your own payback and incrementality data.
Channel allocation inputs and result
Illustrative model · RGM analysis. The weights are a sensible starting point for a planning conversation, not a guarantee — tune them to your own channel payback and incrementality data.
How to use this allocator
- Name the primary goal.Pick the one outcome the budget is mostly for. A budget aimed at acquisition looks nothing like one aimed at retention — that single choice moves the mix the most.
- Enter the working budget.Use the money you actually allocate across channels — media and production, not headcount. The split scales with it.
- Set stage and model.Where you are and what you sell tilt the weights: a just-launched DTC brand and a scaling B2B SaaS get very different mixes for the same goal.
- Choose a risk posture.Concentrate to push budget into the channels most likely to pay back; diversify to spread risk across more of them. Watch the diversification score move as you do.
- Read the split, then the flags.Check the per-channel percentage and dollars, the concentration read, and any “too thin” flags. Then copy a share link, download the CSV, or print a one-page plan.
RGM Expert Says
We reach for this in the planning meeting, right after someone says “let’s put more into TikTok.” That sentence skips the two questions that decide a budget: what is this money for, and how much concentration risk are we taking. The allocator forces both into the open. Set the goal honestly and the mix stops being a popularity contest between channel owners and starts being a portfolio matched to an objective.
The diversification read is the part clients feel most. A brand doing 80% of its acquisition on one platform is efficient right up until an algorithm update, a policy change, or an auction shift erases the channel — and there is no second engine warm. The Herfindahl score puts a number on that fragility. Sometimes concentration is the right call: early, when one channel clearly pays back and you are still scaling into it. But it should be a decision, not an accident, and the concentrate-versus-diversify control makes it one.
The other quiet win is the too-thin flag. The most common allocation mistake we see is a small budget sprayed across eight channels, none of which ever exits the learning phase. Three to five channels, each funded past the threshold where the algorithms and the creative can actually work, beats a fragmented ten every time. When the tool flags a 3% slice, the honest move is usually to fold it into a neighbor and let something reach scale. Treat the output as a hypothesis for the quarter, then prove it with your own payback and incrementality data — that is where a plan becomes a strategy.
How it works
Allocation isn’t guesswork, but it also isn’t one formula — it’s a set of priorities made explicit. The allocator builds the split in four steps, so you can see exactly why a channel gets the share it gets.
First, every channel starts with a base weight for your goal — acquisition leans on paid search, paid social, and video; retention and monetization lean on email, lifecycle, and CRO; referral goals lean on partnerships and word-of-mouth loops. Then each weight is scaled by a growth-stage modifier and a business-model modifier:
Those weights are normalized to 100%, then a risk exponent sharpens or flattens the distribution — concentrate raises each share to a power above one (widening the gap between big and small channels), diversify raises it to a power below one (evening them out):
Each channel’s dollars are simply its share of the budget. Finally, the diversification read is the Herfindahl-Hirschman Index — the sum of squared shares — which rises toward 1 as the budget concentrates and falls toward 1÷n as it spreads evenly:
- basegoal,i — the starting weight for channel i under your goal. stagei and modeli — multipliers for growth stage and business model.
- γ — the risk exponent: >1 concentrates, 1 is neutral, <1 diversifies.
- HHI — concentration index; higher is more concentrated (efficient, fragile), lower is more spread (resilient, sometimes sub-scale). Slices below your minimum viable share are flagged to fold into a neighbor.
The Herfindahl-Hirschman Index is a standard measure of concentration used in economics and antitrust (U.S. DOJ). The goal, stage, and model weights are RGM’s own illustrative framing for education — validate any real split with your channel-level payback and incrementality data.
Most brands buy channels before they choose a strategy
The single most common budgeting mistake isn’t picking the wrong channel — it’s picking channels at all before deciding what the money is for. A budget aimed at winning new customers and one aimed at keeping the ones you have should look almost nothing alike, yet many plans use the same split for both because it’s what ran last quarter. Starting from the goal is what turns a media plan into a strategy.
Concentration is the risk nobody prices. Efficiency pulls budget toward the one channel that pays back best, and for a while that’s correct. But a portfolio that earns 80% of its growth from a single platform is one policy update, auction shift, or account suspension away from a crisis — and rebuilding a cold channel takes months you may not have. The diversification score exists to make that fragility visible before it bites, so concentration becomes a deliberate bet rather than a blind spot.
Spreading too thin is the opposite failure. A modest budget split across eight channels usually funds none of them past the learning phase, where algorithms are still guessing and creative hasn’t found its legs. Research and hard experience both point the same way: a focused set of three to five well-funded channels beats a fragmented ten. The allocator’s too-thin flag is there to push you back toward focus — and to remind you that the loops you own, like SEO, content, and lifecycle, compound in a way rented reach never will.
Where marketing budgets actually go
There is no universal “right” split — it depends on goal, model, and stage, which is exactly what this tool varies. But public benchmarks help sanity-check the shape of a plan. Use them as a reference, not a target.
| Reference point | Typical figure | Read it as |
|---|---|---|
| Marketing as a share of company budget | ~7.7–11% | Total marketing envelope |
| Share of marketing budget that is digital | ~55–60% | Digital vs offline |
| Focused channel count that outperforms | 3–5 | Avoid fragmentation |
| Brand vs demand-gen split (Binet & Field) | ~60 / 40 | Long vs short balance |
| Retention vs acquisition cost gap | ~5× cheaper | Why loops pay back |
What the strategy field says
“The essence of strategy is choosing what not to do.”
“Good strategy works by focusing energy and resources on one, or a very few, pivotal objectives.”
Growth loops reinvest their output as the next cycle’s input — which is why they compound where funnels leak. (paraphrase)