How many times do you think of setting up a budget for your marketing efforts? We guess, each year!
Well, one thing’s for sure, this is an important question as you go back to thinking and planning it every year. And not just important but this question is tricky as well. Why? Let us tell you.
If you spend little in your marketing efforts, it may mean that your message won’t reach all your potential customers.
And believe us no business no matter how successful it is, don’t want to make this particular mistake. So how much is the right amount to spend?
What is the right strategy for your marketing efforts? Which marketing channels will see growth? What kind of marketing best suits your business.
These questions can’t be neglected when you are planning the spend on digital marketing. All of these questions are important for you to figure out.
And how do you exactly do it? Planning to read several articles and get some tips extracted from it? Well, you can do that but we have a rather better way for you.
This article will help you out with the best questions to be considered when planning your marketing strategy. Let’s have a brief look at what we will cover here.
Table of Contents
1. Changes in Traditional Versus Digital Marketing Spend
2. How to plan your digital marketing budget?
3. How to create your digital marketing priorities?
4. How To Allocate Marketing Budget Across Digital Channels?
Isn’t it a comprehensive guide to solve all your queries? So without further ado, let’s get started:
Changes in Traditional Versus Digital Marketing Spend
For quite some time the investment in traditional marketing has been constantly falling each year. Digital marketing has consistently grown double every year after year.
This in a way means that most of the businesses have been spending a large chunk of the budget-making most of it.
How do you know where you need to send your marketing budget? This starts with a clear idea of both types of marketing.
So one thing you need to know is that it doesn’t matter what kind of high product you are using. The most important thing is to choose the right marketing techniques.
The traditional marketing is not a new marketing form usually leveraged to reach out to semi-targeted potential customers.
For well-established brands with an offline audience can’t ignore this kind of marketing. But for Small and Medium businesses who are tight on budget, this kind of traditional marketing won’t be a good idea.
So the new businesses are using digital marketing funnel.
How to plan your digital marketing budget?
So before we start by telling you how to plan your digital marketing budget. Here are some facts that can help you identify how much it is advised to spend on your marketing, in this case, digital marketing efforts:
- Digital marketing budget is recommended to be 7-8% of your Gross Revenue
- The online marketing budget of companies is estimated to be around 45% in the year 2020
- Social media ads and video market will be growing.
After you have checked the facts, you know how crucial digital marketing is.
Now comes the question of how much money needs to be spent, how much should you dedicate to each tactic, and other expenses that need to be planned simultaneously.
1. Set the Goal
The first step is to set concrete marketing objectives as you don’t want to waste your time trying things that won’t work for you.
You can go with the second approach where you can set your primary and secondary goals. just make sure you can achieve three different results through these goals.
Your final goal could be boosting your brand awareness, increasing your revenue, and creating brand loyalty. These goals need different approaches to have a big effect on the overall digital strategy.
2. Analyze the Previous Marketing Strategy
Once you are all set with the objective, the next step is to analyze your previous marketing strategy. Here you need to see what has worked to achieve the goals.
This is applicable if you have previous digital marketing experience. Here are certain things that you need to monitor:
- When do you experience the most success
- What didn’t work
- Check why these strategies didn’t work for you
3. Divide the Budget based on Previous Profit
So now you know that in the marketing strategy, it’s time to break your budget based on success and priority. So you have to assign some budget to social media if that is working well.
For example, you may hire staff to post and create content on multiple channels. And how great would it be to hire a social media manager and new social media tool? These tips will help you take full advantage.
4. Choose your Platform
The platforms are based on your business where you can get most of the profit. So if you are into the business to business, then you need to make content that is for office people who are on desktop and laptop.
On the contrary, if you are into the business to customers, then you may find your potential customer on tablets and phones.
How to choose your digital marketing priorities?
So to start with priorities, you need to have a clear understanding of your product, business, and demographics.
Next comes the customer’s interest and age group that will help our customers serve the customer better.
1. Stay Focused
Here are certain things you need to stay flexible with when making a marketing strategy:
- Stay tuned with upcoming trends
- Shifting SEO patterns
- Keep modifying your calendar and timeline associated with it
- Stay KPIs focused
- Keep preparing reports and discuss it with team
A successful strategy means you keep working around it and tweaking it as per the requirements. For that, an integral part is to continually monitor your marketing efforts.
2. Understand your Customers
Your marketing strategy falls apart if you don’t have a good understanding of your potential customers. There are certain things that you need to consider are:
- Who will buy the product
- Why they will buy
- Where and how they will buy it
You need to dig deeper for various demographics to know your audience by evaluating these things:
- Locate channels where your audience are available
- Speak in their language
- Try to relate to their problems and how to offer the solution
- Create a useful persona for different demographics
- Work on action-oriented experiences
- Start segmenting and target accordingly
3. Get your Basics Right
Here are certain things that you need to get on track to put your marketing efforts together:
- Optimize your content on the website on smartphones and desktops
- Don’t forget to mention your company’s phone number, CRAs, and the company’s address
- Connect your website with a map app
- Make sure your website is optimized
- Keep a check on your social media accounts
How To Allocate Marketing Budget Across Digital Channels?
Some of the forward-thinking companies at times allocate most of the marketing budget to digital marketing.
To help you with an idea, let’s help you with a sense of how to allocate a marketing budget to different digital marketing channels.
- Facebook- 2.24 Billion Users
- YouTube (Video)- 1.9 Billion Users
- Instagram (creative images)- 1 Billion Users
- LinkedIn (Great for B2B)- 575 Million
- Twitter (in-the-moment advertising)- 330 Million
- Yelp (Expensive)- 142 Million
So this is how you can decide the budget for these digital platforms:
1. YouTube Ads
If you want to spend on YouTube ads, you need to see a growing Return on Investment (ROI). For a small business spending maximum of $5,000 makes sense and you can further adjust the budget as per the results.
Regardless of your business size, you should not neglect the power of SEO. All your competitors are trying to rank higher on search engines like Google and Yahoo.
For some serious result, you need to spend at least $5,000.
3. Facebook Ads
So how much do you need to spend on facebook ads, where several users visit. If your business can benefit from it, then you should be from $5,000-$10,000 of the marketing budget.
Remember, you are spending $1 for almost 100 visitors that come to your website.
4. Paid Search
So when we are talking about Paid Search, you don’t necessarily have to devote a particular budget in the initial stage but what you should keep doing is keep testing.
And just don’t start testing the same copy but keep changing them. Also, analyze what type of ads are generating more value to your business.
The budget should be allocated based on where you are with your SEO keyword that you are planning to use in your Paid Search.
5. Instagram Influencer
When we say Instagram influencer, you don’t necessarily have to go for celebrities but you can pair up with those who have a decent amount of followers.
This is a great way to make your brand get visible among your customers. So spending around $1,000-$8,000 is considered to be a wise plan for small businesses to make their brand popular.
Just make sure that Instagram is an effective platform for your product or business.
6. Content Marketing
This strategy works for every kind of business. Having resources and guides to help your customers can be very compelling.
You should focus on creating a relationship with your customer through the content. If you can answer most of their queries and understand their problem, they are most likely to trust you.
You can either hire a team of content writers in the house or hire a freelancer to do the work for you.
Here are three marketing budget strategy that you can follow:
- Traditional Budget: In this model, you start with a budget and then allocate each digital channel some amount. In this case, once the channel does not reap any result you can’t do anything about it.
- Flexible Budget: In the flexible budget, a depleted category can be replaced by another digital marketing channel. If you run out of budget in one channel and another category that has extra money can fulfill it. So you know if you run out of money and have another category where you can have extra to spare, make it over.
- Zero Budget: In this model, you begin allocating every digital channel with zero budget at the beginning. As you increase the amount in every channel, the analysis should be there to justify the cost.
So what does this all mean?
All these different aspects of digital marketing have been put together to help you understand the objective, give you an appropriate direction, and allocate budget accordingly.
So here we are summing up what we gathered from the above article:
- Companies are increasing the Digital marketing budget
- Digital marketing is helping business get faster and effective results than the traditional advertising channels
- Companies have increased their budgets almost double in making their marketing strategy more effective
- B2C is spending more on marketing efforts
- Wise businesses start slow with marketing send and eventually grow based on the results
- The budget is allocated based on the social media platform that can reap business best results
- Every channel has a different purpose to serve and should be treated that way
Bringing some of these facts here will help you confidently apply these tips and methods. Hope you liked the blog and found it useful.
And don’t forget to mention the digital platform that helps you get the most bang for your buck in your marketing efforts.
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Abhay is a Digital Marketing Guru and an accomplished entrepreneur with an experience of a decade working with various businesses varying from startups to established brands. He co-founded many companies like Logicsofts, PrintYo, CrazyRise and more. He is passionate about SEO and Online Data Analytics, which plays a vital role in any business to grow and mutate as per the data results.
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