In today’s digitally driven world, digital marketing is the bread and butter for every business. From acquiring leads and cultivating their interests, to crafting a social media presence, digital marketing has become the way businesses put themselves on the map. No matter the size, digital marketing is an important factor for every business. The big question is how much time, effort and resources should be devoted toward your digital marketing efforts. In other words, how much should you budget for marketing?
In this blog post, we’ll go over how to allocate your budget effectively towards a digital marketing strategy that makes sense for your business. Marketing budgets have drastically changed over time. With the rise of technology, the spend for digital marketing efforts has increased over the years while traditional marketing spend has decreased. As displayed in the CMO study seen below, you can see how clearly defined this trend is:
At this point, you may be asking yourself why brands are hashing out extra dollars for digital marketing campaigns and services. The answer is truly simple: because digital marketing delivers. In traditional marketing efforts, there’s no real way to count metrics and measure effectiveness. Marketers had to go through leaps and bounds to get information from customers. Now, everything you need to know about your users and where they are in the sales journey can be seen on a dashboard. The objective of an advertising budget isn’t only to raise brand awareness, it’s to contribute to your business’ bottom line.
How to allocate marketing budgets across channels
In preparation of an advertising budget, you’ll need to conduct some good ol’ audience research. Wherever your target audience is hanging out on the internet is where you want to be. For example, if you knew a bunch of college students ate at a particular restaurant in the neighborhood, and you are a used car salesman, it would make sense to hang a couple flyers advertising your cars in that specific restaurant. The same concept applies to the internet. If you know that your target audience had a habit for checking SportsCenter at 6:00AM in the morning, and you’re a sports apparel eCommerce retailer, it would make sense to advertise there.
But what do you do if there’s a good chunk of your audience in two places? For example, if there was a large portion of your audience scrolling through Facebook at 6:00AM and a good chunk on Sports Center as well? If this is the case, you can run A/B tests on different platforms to see which one produces the best results.
In addition, you need to pay special attention to some key performance indicators (KPIs) so your business can judge the effectiveness of your campaign. These can be anything from likes, comments and shares, to email newsletter sign-ups and conversions. Decide which metrics are most important to your current advertising strategy, as they will make up the objective of an advertising budget. Once you have determined which channel is most effective, you can either choose to go with the one that yielded the most results from your A/B tests. You can also try another advertising budget example by splitting your money 80/20. This way, you’re still generating brand awareness in both places, while maintaining a higher presence on the platform of your choice.
From these campaigns, the most important thing you’ll want to know is how to calculate ROI in digital marketing. As the return on your investment, your ROI will be your cost to benefit ratio. That is to say, it’s how much you gained divided by how much you spent. Don’t be intimidated by the numbers either! You can find many a free digital marketing budget calculator on the net, but understanding how to compute ROI yourself is just part of the process.
Which marketing strategies and tactics get the best results?
There are dozens of different marketing strategies out there, and the best part is that, no matter the size of your eCommerce marketing budget, there are tactics that will help your business grow. Here are a couple that will help get your brand running in the right direction:
Hopefully these advertising budget methods have given you a better idea on how to divvy up your marketing budget for a high ROI. With technology and the internet advancing so rapidly, it can be difficult to determine where to focus your efforts. Here are the key takeaways from this blog post one more time:
As always, good luck!
This blog post is written by Therese Palmere, she is a content writer and consultant for Aumcore, a New York based digital marketing agency that specializes in SEO and PPC Services. She writes about everything, from web design and social media marketing to emerging marketing trends.