Knowing how much to spend on various marketing channels and maintaining a balance is the hallmark of a good online marketing budget.
How much you spend and how you spend are the pillars of any budgeting activity, and it is no different for digital marketing budgeting.
I know that it is easier said than done
But with a clear mind about the fundamentals of budgeting that has been established as industry trend, the bigger picture can be captured in a more convenient way that makes the task of creating a digital marketing budget template quite easy.
In this post I am sharing some tips based on personal experience that can be used as a guide to budget planning for digital marketer in 2016.
The Basic Task
First of all, you need to know how to optimize your digital marketing budget. It all begins by figuring out the total money that is to be spent on marketing activities.
The money that is allotted for online marketing budget is then to be channelized in varied proportions to various digital marketing tactics that are deployed. You should also set some money aside for other allied expenses, and for making provision for acquiring new tools. This exercise culminates in giving shape to the digital marketing budget template
Set A Baseline
Where to start from? How much should be the total money allocated for digital marketing budgeting? These are obvious questions that you would be confronted with when starting the budgeting activity.
I would suggest you refer to the industry trends that are already established and normally used for budgeting. According to the norm that is based on the total revenue of the company, the overall marketing budget is pegged anywhere between 5% and 15% of revenue. For me, taking a mid path and keeping the marketing budget around 9 to 10 percent seems quite rational.
According to the digital marketing budget template, the share of online marketing budget varies between 10% and 50% of the total marketing budget. The exact allocation would depend on the amount of thrust that is given to digital marketing.
The Hardest Decision
Having done the ground work for digital marketing budgeting, it is now time to take the hardest decision about splitting the budget into different digital marketing channels and initiatives that you are planning to undertake. Since digital marketing comprises of SEO, social media, PPC, content marketing and so on, the total budget allocation is then distributed among these heads.
The most important thing about online marketing budget is that you have to make every dollar count and make it go as far as it is capable of going. And this is also the most difficult thing to do. Problem arises due when there is a lack of clarity in thought about how to approach the task of allocating money on various strategies.
I know about people who have acquired the skill of undertaking the online marketing budget activity with considerable ease by virtue of their ability to start from the top and then drill down to the bottom. All it requires is a structured approach that begins with goal setting and reviewing the past campaigns for a threadbare analysis about its success and failure.
This approach is part of the digital marketing budget template that has been discussed in this post.
Set The Goals
Any budgeting exercise is preceded by a budget plan that is derived from the overall marketing goals of the company. The nature of budget will depend on the goals that are set.
From increasing the customer base to improving customer service to creating more awareness about brand, anything or everything can be part of the digital marketing objective. The marketing goals have to be backed by appropriate marketing strategy.
Goals provide the necessary direction to the online marketing budget and highlight the areas that are in focus. After determining the thrust areas in marketing, the task of allocating money for achieving each goal becomes easier.
Align Strategies With Industry Trends
The best way to stay tuned with industry trends during digital marketing budgeting is to adopt the best practices of the industry. This would automatically align the strategies with the ongoing trend of the industry. But this does not necessarily mean imitating strategies that others follow. This approach ensures that you are not swimming against the tide, and by using innovative strategies you can stay ahead of your competition.
When deciding on the online marketing budget, you need to keep your key marketing strategies in mind. Having the right strategies ensures that every dollar you spend can be used to bring the maximum ROI (return on investment). By examining the strategies of competitors and by analyzing it you will be able to understand which strategies are worth pursuing and which need to be discarded.
Strategies that work best should be allocated more funds from the online marketing budget as compared to those that do not appear to be remunerative.
Review Past Strategies
How the marketing strategies of the previous year have performed gives an indication about which way to go in the current year. Analyze the outcome of each strategy separately to figure out the returns from it. Although all strategies are devised with the best intent and understanding, unfortunately some can simply turn out to be disasters.
Look at the spending on successful strategies and then decide whether or not to enhance the online marketing budget allocation for it in the current year. The not so successful strategies also have to be analyzed to unearth the reasons of failures to understand the possibilities of resurrecting it in the future.
Focus On Success and Not Cost
I hope it is now clear to all about the ways of putting the money where the mouth is. During digital marketing budgeting, it has to be remembered that the budget allocation depends on the success level of the strategy and not the cost incurred for implementing it.
The returns obtained from the strategies are guiding factors in distribution of funds. More the returns, more is the likelihood of pumping in money to those strategies.
Divert Funds From Non-Performing Strategies
Strategies that did not click have to be reviewed to evaluate the possibilities of re-launching it after improvement. But if it is found that it is not worthwhile to try to salvage it, then the best thing is to let it go and look for new strategies.
When any strategy is dropped, the allocations of online marketing budget that had been made to it can be diverted to some other strategy that is in focus.
Trying to experiment with new strategies is an established norm of the industry for which some funds has to be kept aside. As per industry practice almost 20% funds are earmarked for it. But how much it should be for you is a call that you have to take.
Back It Up With Quality Marketing
So far I have talked about the methods of digital marketing budgeting with emphasis on how to identify the channels of fund allocation and what should be the criterion for funding. The process is based on setting goals, reviewing past performance and staying aligned with industry trends. Having completed this exercise, it might seem that we have reached the end of the online marketing budget.
This is only partially correct because the real test lies in making sure that returns of the budgetary allocations are up to the mark. This is only possible if you are able to add real quality to your marketing initiatives. Only proper marketing efforts can do complete justice to the money that has been budgeted.
Put focus on marketing efforts
Some of the initiatives that boost the marketing efforts would include the following.
- Know your target audience – Since marketing involves a lot of advertising, choosing the right advertising media is directly linked to the success of marketing. Response to advertising across different demographics is always greatly different. The advertising media has to be chosen accordingly. Targeting elderly audience by using the social media can turn out to be quite unproductive because this category of audience has the least participation in social media. Similarly, using pop up ads for millenials can be a disaster due to the use of ad blockers by this group of audience. Behavior and interests of target audience are prime drivers in developing the right marketing strategies.
- Quality content – In digital marketing, content is king as it represents your business in the true sense. Your products and services, values and brand equity are all conveyed through it. Do not hesitate to spend money in developing quality content and if it means hiring professionals to do the best job; then so be it! Professionals can either handle your entire social media account or can be entrusted with the job of content development.
- Be consistent – Content may be presented differently on different media like social media and newsletters, but the core message should be consistently displayed through it.
As a digital marketer, it is now your turn to make best use of the guideline to make a difficult task appear easy. For more news and updates on digital marketing, keep visiting our website. Need more tips and tricks? Get your free report today!