Throughout our careers, digital marketing professionals answer one question more than any other: “How much will it cost?” Whether you’re a business owner, marketing manager, independent contractor, or work for a digital marketing agency, your ability to manage your marketing budget effectively plays a large part in your success.
As a general rule, marketing expenses should represent somewhere between 7% and 15% of a business’s overall revenue, with the “sweet spot” being around 10%. Even so, how your organization allocates its digital marketing budget will play a large part in your organization’s growth. To help get you started, here’s a four-step guide to creating your organization’s digital marketing budget.
1. Set Your Objectives
Marketing is fundamentally a goal-oriented practice. Whether you work within an organization, as part of a marketing agency, or as an independent consultant, all marketing professionals understand that our work is tied back to a business’ broader objectives. Setting targets that support these objectives is a critical part of what we do.
Think about the specific, measurable goals you’re looking to achieve through digital marketing. Are you aiming to generate brand awareness, create more brand loyalty, or are you simply looking to drive sales? Different tactics are required to hit these targets; selecting these tactics will have a significant effect on your digital marketing plan, not to mention your budget.
2. Analyze Past Performance
It is critical to analyze the results of previous efforts before planning your digital marketing budget. Real-world data from the recent past is the best indicator of strategies that will drive results for your business moving forward.
If your business has tried digital marketing tactics before, look at them critically to determine what will work again. Where were your areas of success? Did your paid online advertising generate meaningful traffic to your website? Did your search marketing efforts lead to a higher search ranking in Google?
Even if previous digital marketing strategies didn’t get you the results you had hoped for, there is still plenty of insight present. Especially if your competition used the same tactics more effectively, consider how your approach can be tailored to meet your objectives and generate consistent results for your business.
3. Allocate Based on Past Success
Once you have clearly-defined goals and a solid grasp of what has (and hasn’t) been working, you can start building your budget based on your organization’s priorities. There is no one-size-fits-all solution in digital marketing; every business will have different needs depending on industry, niche, goals, and budget.
Don’t be afraid to invest in what has already yielded results. If your organization has seen results from search marketing, be ready to spend additional time, labour, and capital creating more content. Conversely, if your social media advertising isn’t generating traffic or leads, it may be prudent to decrease your ad spend or drop it entirely.
When allocating your budget and resources, aim to strike a balance between short and long-term strategies. For example, online advertising has a considerable short-term ROI, but requires constant investment to perform correctly. Meanwhile, search marketing requires a lot more time to build momentum, but will deliver results over a more extended period. When setting your digital marketing budget, ensure that you allocate resources to meet both your short and long-term goals.
4. Continually Monitor Results
All digital marketing strategies work best when their performance is continually tracked and improved. Tools like Google Analytics will allow you to monitor your advertising, website traffic, and more to see what aspects of your strategy are the most effective. Further, monitoring tools will enable you to refine your approach to achieve consistent results while making any necessary budget adjustments along the way.
While budgeting is an integral part of any digital marketing strategy, it’s far from the only thing your company will have to consider. Businesses should focus on the goals they want to achieve through digital marketing before considering the budget. Understanding your short and long-term objectives will help give your budget context and allow you to allocate your resources to better support your goals.
Organizations looking to make the most of their digital marketing budget should consider utilizing an experienced digital marketing agency. In addition to expertise with a wide variety of strategies and tactics, the right agency will be able to help your digital marketing mix achieve consistent performance over time.
With our unique Marketing Systems Engineering approach, Atrium Digital is a digital marketing agency specializing in creating systems that allow businesses to reliably invest in their future, defend against competition, and expand to new markets. Contact us today to learn more about how Atrium can help you achieve consistent results from your digital marketing.
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