By Chris Mouton on Oct 4, 2021
Whether you manage your digital marketing in-house or you outsource to a company that offers digital marketing services, having a well-planned budget is essential. This budget will heavily affect your marketing performance throughout whatever period for which you create it, whether that’s a year, six months or a quarter. Below are six steps you should always take to properly plan and make the most of your digital marketing budget.
When creating your digital marketing budget, one of the very first steps you need to take is to determine your goals. What do you want to achieve within the next quarter? The next year? The next five years?
Do you want to increase brand awareness? Do you want to increase sales of a particular product? Would you like to increase your number of email subscribers? Whatever the case may be, having a list of your goals gives you an idea of the channels and strategies to which you should allocate budget.
Always ensure that you and your team are coming up with SMART goals. They should be
Using these criteria will help you create clearer and more actionable goals.
For instance, instead of setting a vague goal such as “increase conversions”, set a goal such as “increase number of email subscribers to 200 by the first half of the year.” Such a goal gives you precise reference points and makes it easier to plan your budget.
Remember that your digital marketing goals should align with your brand’s overall goals and vision. One of the best ways to achieve this is by being aware of the activities of departments beyond marketing such as the sales, business development and production departments. This way, instead of your marketing budget existing in a vacuum, it will be well synchronized with the rest of your company’s strategy.
After setting the goals you would like to achieve in the future, it is important to look back at the strategies and tactics used to achieve goals in the past. That way, you can learn from your mistakes and maximize your budget in the coming months or years. Analyze the results of your past digital marketing strategies to find out which tactics worked and which ones did not quite hit the mark.
If at all possible, analyze past results in relation to your present goals. Let us take the goal to increase email subscribers for instance. Is there any campaign you ran in the past that gave you a spike in email subscribers? If yes, what kind of campaign was it? You may be able to reuse this strategy and even tweak it to get better results.
Once you have set your goals and audited past efforts, you can come up with a list of digital marketing strategies to implement. As already mentioned, the sweet spot is strategies that you have had success with in the past that are in line with your present goals. But, even if a strategy failed to yield satisfactory results, it doesn’t mean you should never use it again.
SEO, for instance, is a powerful marketing tool. While your SEO strategy might not have worked well in the past, SEO is still one of the most essential digital marketing strategies. It is simply a must. What you need to do is figure out why it didn’t work for you and how you can spend your budget more wisely to get better results. It might be that your company doesn’t have the necessary expertise and you should consider hiring an agency that offers digital marketing services.
Of course, you won’t want to limit yourself to maintaining the same strategies you have already tried. The market is constantly changing, and trends come along that you can tap into. Your budget should give you some room for experimentation.
Once you have created your list of strategies, you’ll want to have a good sense of your overall budget so that you can move on to allocating parts of this budget to each of the initiatives on your list. There are several factors to consider when trying to determine this figure.
Two of the most crucial ones are your company’s size and revenue. If you are a small business with yearly revenues of less than $5 million for instance, the U.S Small Business Administration recommends that you spend 7 to 8 percent of your revenue on marketing.
Your company’s stage of growth is another essential factor to consider. If you are in the startup phase, one of your priorities will be to build brand awareness and get the word about your product out. Therefore, the size of your marketing budget may vary very from companies of the same size and industry that have been in business for years and are not actively seeking to increase growth or market share.
Once you’ve considered all the factors and decided on a baseline figure, it is important to remember that your budget is not set in stone. There could be a need to expand it when new trends and opportunities emerge. Or, a particular strategy could yield massive success resulting in the need to increase marketing spend to get the most out of it.
After figuring out how much you can spend, you can move on to allocating your total budget to various initiatives on your list. Do some research to find out how much needs to go into each of the strategies you’ve outlined. Find out the costs of every channel and tool involved.
Marketing on social media platforms, for instance, can be completely free. But, to really unlock the power of social media, you might want to invest in social media ads and premium social media management and analytic tools like Hootsuite, Buffer or SproutSocial.
You should also think about how you are going to execute each strategy. If you are thinking about social media advertising for instance, are you going to handle it in-house, employ a freelancer or hire a Facebook advertising agency? If you choose to go with one of the last two options, you need to find out how much it will cost to employ these experts.
Once you’ve considered all the costs involved and calculated how much it would cost to implement each of the strategies on your list, take a step back. Is your overall budget large enough to accommodate all of the strategies you would like to implement? If the answer is no, you might need to cut down your list and prioritize your spending.
Figuring out which channels to prioritize can be difficult. One of the most important factors to consider is the characteristics of your target audience. If you haven’t already, take time to build unique buyer personas based on data you have about your existing customers. Creating buyer personas and learning more about your target audience can help you discover which channels they are likely to use when looking for your products or services.
Competitor analysis is another tactic you can use to figure out how to prioritize your budget. Finding out what is working for the competition can help you figure out which channels are more likely to yield excellent results.
Also, as mentioned above, you should analyze past campaigns and prioritize channels that have worked for you in the past.
After following all the steps outlined above, you should have a solid and well-thought-out budget. You need a platform that lets you record your budget and all of the relevant details in a way that is easy to share, revise and analyze.
For a small team, traditional tools like Excel and Google spreadsheets are a great option. They are easy to use, highly customizable and completely free. But, since they require you to do manual calculations, they are prone to human error, and they can be time-consuming.
There are several other advanced budgeting and planning software available. They make it easier to collaborate with team members, calculate and forecast costs, and analyze results. Some excellent choices are Allocadia, Knowlium, MPlans and PlanBold.
If you would like to take the load off yourself this coming year, hire an agency that offers digital marketing services! But, don’t just go for any agency. Find a reliable one with well-trained experts that fully involve you in the planning process.
Umbrella Local offers all this and more. As a holistic digital marketing agency, we know how to create a marketing budget that will work well for your business’s unique goals and vision. In addition, we can take care of every other aspect of your digital marketing strategy. Get in touch with us today to learn more.
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