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e’re midway through Q4, and it’s time for marketing professionals to decide how to allocate their 2026 advertising budget. While many marketing departments might already be locked into recurring annual contracts, it’s always worth taking a fresh look at where your ad spend is going, how it’s working for your brand, and whether it’s helping you reach your intended audience.
At the same time, you’ll want to keep an eye on emerging platforms and new investment opportunities in the quickly changing marketing landscape. Here, we look at the advertising-related questions you should revisit every year, what to evaluate going forward, and common budgeting mistakes to avoid.
Steps for Planning an Annual Advertising Budget
Below are a few essential steps to take whenever you’re planning your annual advertising budget — no matter how many times you’ve done it before.
- Examine What’s Working: Before you plan your 2026 ad spend, look closely at your 2025 advertising metrics and analyze which channels and campaigns generated the most leads and bookings this year. Then, increase your spending on top performers and cut (or eliminate) spending on underperforming areas.
- Assess Your Audience: Consumer behavior is constantly evolving, and each generation interacts with ads and social media differently. Track how your advertising channels performed across different audience segments, and reference this information against the demographics of your frequent customers.
- Dive Deeper into the Data: Move beyond impressions and clicks to focus on more nuanced KPIs (key performance indicators) that link directly to revenue. For example, hotels and resorts can track metrics such as occupancy rate, average length of stay, cost per occupied room, and loyalty mix (the percentage of business that comes from repeat visitors enrolled in a loyalty program).
- Set Clear Goals: Define what you want to achieve with your 2026 advertising and attach a number to the goal so you can measure your progress at the end of next year. Do you want to grow direct online purchases by 15%? Achieve 20% revenue growth from new customers? Increase your repeat business by 10%? Ensure every dollar of your ad spend is connected to a measurable outcome.
Key Investment Areas for 2026
Once you’ve assessed your 2025 advertising efforts, consider what you want to put money toward in the new year — a good rule of thumb is to allocate about one-quarter of your overall budget for testing new ideas — and take into account the following investment areas:
- Social Media and Google Ads: For Google Ads, base your budget on the average cost per click (CPC) for your target keywords, accounting for travel industry trends and competitor analysis. To determine your social media advertising budget, you can simply do the math: Multiply the number of website visitors you need to achieve your 2026 goal by what you’ve been paying for each visitor.
- AI Tools: You can optimize your ad spend by using an AI tool that continuously monitors your campaign performance across multiple channels (e.g., Google Ads, Meta, TikTok). Tools like this can automatically reallocate budgets from underperforming ads or platforms to those delivering better results. If you want to go super high-tech, try an AI tool that can generate and test thousands of ad variations (with different images, headlines, and calls to action) to determine which resonates best with specific audience segments.
- GEO Ads: GEO — generative engine optimization — will play a prominent role in online advertising in 2026. You’ll want to optimize your ads to offer clear, comprehensive information. For sponsored long-form content, focus on creating high-quality, easily digestible posts to improve AI search visibility, and include FAQs that position your business as an authoritative source.
Common Budgeting Mistakes to Avoid
Now that we’ve covered the dos of planning your 2026 ad spend, here’s an overview of what not to do:
- Don’t Throw Spaghetti at the Wall: Avoid spreading your ad budget too thin across multiple channels — sometimes known as “spray and pray.”
- Don’t Ignore Lead Quality: Ensure your campaigns aren’t just generating leads on paper; they are producing quality leads that actually convert.
- Don’t Underestimate “Hidden” Costs: Remember to budget for production of ads, landing pages, and videos created for paid media, not just the ad spend itself.
- Don’t Think of Your Budget as Set in Stone: Once your 2026 advertising budget is in place, don’t be afraid to be flexible. The most successful budgets are dynamic and nimble, allowing for quick adaptation to market shifts and new opportunities.
Looking for expert support while planning your 2026 ad spend? Our team can help. Reach out today to schedule a consultation.