A latest research on the evolution of marketing showed that 58 percent of businesses are shifting their budgets from traditional to digital marketing.
Depending on factors such as business type, size, and industry, the actual monetary amount of your digital marketing budget will vary, but you can learn from tips and techniques to optimize spend.
In this blog, we'll walk you through some practical advice on how to make the most out of your company's digital marketing budget and achieve your company's goals.
Here are a few things to consider:
You need to be aware of which components are classified as "digital marketing" and which are not if you want to maximise the return on your expenditure. For many businesses, if it's online, it's considered digital marketing, but not every activity or service may fall under the marketing umbrella.
By deciding what’s included and what’s not, you can focus on the right platforms.
Some of the activities to consider include:
Although not considered a marketing activity by many, it is a valuable tool when it comes to driving relevant traffic onto your website and producing qualified leads.
It’s easy to neglect content creation when thinking of your marketing budget, but creating great content is a critical part of the overall picture.
The people in your target market are likely to use social platforms like Facebook, Instagram, Twitter and LinkedIn, and social media is becoming a massive source of qualified prospects for many companies.
A 'pull' rather than 'push' type of strategy, email marketing continues to be a valuable way to market to people online.
Modern banner ads are non-intrusive and targeted, and video is emerging as the marketing wave of the future.
When it comes to online marketing, this is sometimes regarded as the gold standard because you only pay when someone clicks on your advertisement and you can target with precision.
The key to creating any type of budget is to closely examine the numbers and figure out the disposable income that you can rely on.
After you have that amount at your disposal you now need to decide where that money will go. There are other areas of your company and other people counting on the portion of that amount. Those people will plan their own strategies and have their own startup marketing budget.
Marketing is only one area you need to incorporate in a budgeting plan and online marketing is an area within an area. Got it?
Depending on your goals and plans your online marketing costs can be even 80% of the overall marketing budget. On the other side, it could be as little as 5%, it all depends on which industry you are targeting, where do your competitors stand and how people react to your marketing channels.
Note: You should always consider putting some money aside for unexpected costs
To optimize your marketing budget plan, the first step is to get to know your customers better and understand where they spend time online. You may maximise the return on your investment and direct your resources in the right directions in this manner. Since marketers may have preconceived notions about where their ideal consumer is active, the findings of this kind of inquiry frequently come as a surprise to them.
By using analytics (like GA4) and advanced metrics, your marketing team can track where your target audience spends its time, how long they stay, and what causes them to leave. To gather this information it's necessary to create a persona of your ideal customer, so you know what you are looking for.
Create thorough personas of your ideal client or consumer, taking into account their age, gender, work title, income, family life, interests, and any other pertinent information, if for some reason that hasn't happened. To assist you, there is a buyer persona template in our blog on Customer Personas that you can use.
What works for one marketer may not always work for another in the fickle world of digital marketing.
Your business should have defined key performance indicators (KPIs) early on in the budgeting process. By testing across different channels and comparing results to your KPIs, you'll obtain a better understanding of what is and isn't working. You can discover that one channel has a significantly greater conversion rate than the others, or that one channel has a significantly cheaper or higher cost per conversion (CPC).
You may take advantage of possibilities and avoid places where you're not seeing worthwhile results by conducting testing across a variety of channels. By concentrating on the channels that are yielding the best return on investment, you can now maximise your digital marketing spend (ROI). Most likely, the 80/20 rule or, depending on your industry, even 90/10, can be used.
Remarketing is simple to overlook, yet it may offer a solid return for little outlay.
Remarketing, also known as retargeting, is the practice of showing advertisements to visitors who have already visited your website or clicked on one of your ads but failed to convert. Your adverts will now appear as they browse other websites and platforms because they have already indicated an interest in you.
Remarketing did not previously track website visitors to multiple channels. However, if a user clicks on a Google ad, they may subsequently see follow-up ads on Twitter or Facebook.
Giving customers a second and third chance to interact with your brand after their first encounter can help your business make the most of its budget. Additionally, like with any PPC advertisement, you only pay if the ad is clicked.
You may obtain an idea of the finest strategies to maximise your digital marketing budget (factor of both social media marketing cost & Search Engine marketing cost) by looking into what other senior marketers in your sector are doing.
Delivering a stronger ROI on their marketing budget is the top challenge, according to 20% of senior marketing executives and CMOs surveyed, for them in 2023.
This is not to mean that you should closely monitor the competition, but being aware of what they are doing online will help you identify where you need to make changes in order to stay competitive.
Knowing where to devote funds and how to maximise your budget will help you determine your own if a competitor has a sizable market share or you want to take it from them.
Optimisation is a continuous process, particularly in digital marketing. With so many tools available for testing and measuring results, it's crucial to continue testing even after choosing particular channels on which to concentrate your efforts.
The tiniest changes to a campaign might produce dramatically different outcomes. For instance, if an email campaign is yielding a positive ROI, a quick change to the email sequence or a new type of subject line may increase it even further.
Your marketing team must continuously improve the campaigns across all platforms and try new ideas, techniques, and concepts if the objective is to constantly get the most out of your digital marketing budget.
Most of the time, a small adjustment to a campaign won't lead to an increase in costs; thus, if it results in a higher ROI than before, you have successfully optimised your marketing budget.
Allocation and optimization are often seen as distinct concepts by marketers, but in the digital age, the ability to reallocate your budget as circumstances change is a crucial component of optimization.
It makes sensible to allow for some flexibility in budgeting because of this. Since results are frequently noticeable right away, you'll need to be ready to seize opportunities as they arise or abandon a strategy that isn't working.
Take TikTok as an example, where a lot of your customers are posting videos. As you try to engage them on that platform, this can open up a new channel for paid advertising on TikTok or perhaps content development.
It's crucial to have the marketing and sales teams collaborate to achieve your objectives because enhancing your digital outcomes will also allow you to maximise your budget.
With many online marketing campaigns, customers make purchases online without coming into contact with a member of the sales team. To turn leads into paying clients, though, your sales funnel and sales staff must be in sync. Sales and marketing cannot function as a coherent unit and achieve the desired outcomes without working together.
Everybody wants to know how much. How much money will they need to invest to get things started?
As always, the answer is: IT DEPENDS.
It largely depends on the plan you presented earlier. What do you hope to achieve as a result? Do you want to hasten the process and invest more resources in sophisticated marketing methods, or do you want to keep consumers and gradually develop valuable leads that bring in big bucks?
Typically, we advise businesses not to put their primary attention on keeping their customer base, since, for whatever reason, some of them will always leave you and you could end up slowly bleeding money in an attempt to do so.
Always seek out more, whether it's leads, clients, or business expansion.
Note: if you are considering a new marketing channel, put aside more money for testing.
I'll use the example of a business that only uses social media marketing to promote itself in that way to provide you precise figures (online marketing budget = 100% overall marketing budget). If necessary, you can scale that number for yourself based on the variables I mentioned above.
Your financial data's numbers will now be useful. How much money do you have left over? The second factor to consider is the industry you work in.
It's always best to stick to the Lowest Revenue, Highest Expense calculations.
Here is the Average marketing budget by industry, for reference:
Here is how you can calculate your marketing budget range.
Although fairly straightforward, to explain the calculation in the example, if your monthly revenue is $1000000 and your expenses (except marketing expenses) are $400 000. That leaves you with 600k of disposable income. Let’s say you are a B2C company selling homeware. You need 15%-20% of your $600,000 to be put into digital marketing. The budget range can match what kind of growth you are looking to achieve. For an aggressive growth chart, you can use 20% or higher for digital marketing and to maintain steady growth you can use 15%.
That’s $ 90,000 to $1,20,000 a month to spend on your digital marketing budget which equals 100% of your overall budget in our example.
You can scale this up or down as per your specific business numbers.
Setting and maximising your company's digital marketing budget involves a number of factors, all of which are subject to sudden and unforeseen change. However, employing these techniques ought to make sure that your money goes further and is being put to use on the right platforms.
Know how to make the most of your digital marketing budget
Digital marketing presents many opportunities to drive brand awareness and grow revenue. However, you need to understand the fundamentals, channels and tactics available to make the most of your budget.
Tealbox can help you through this journey of optimizing your marketing budget plan and making the most of digital ads.
Book an intro call with us today to make the most of your budget.
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