Allocating Your Digital Marketing Budget: 7 Things To Consider

avatar
by Jacob Solomon Oct 8, 2022 News
Allocating Your Digital Marketing Budget: 7 Things To Consider

Companies are rushing to get their brands noticed by consumers on a global scale in the fast-paced world of digital media.

Effective communication has become easier and more convenient due to the widespread adoption of technology and the internet allowing businesses to connect directly with potential customers and build a loyal fan base.

Businesses of all sizes have an allocated digital marketing budget and strategy. It's important for them to remain competitive against their competition, but it's also important that they have the expertise to get the best results.

If there is no financial capital that can help drive results and build expertise as the business grows, it can seem worthless.

The type of business and the sector in which it operates will affect the percentage assigned to a marketing budget. Those in charge of marketing will have an impact on how much revenue should be spent on a marketing strategy and how much money should be spent on every project.

Setting up a digital marketing budget can be difficult for a small business. If you can get the planning and structuring under control, you will be able to know how much money is needed to set up the marketing budget for your business.

There are seven things you should consider when allocating your digital marketing budget

Understand The Sales Funnel

The sales cycle is the process through which a prospective customer makes a final purchase or sale. Every business has a different sales funnel and it can look different for each customer.

It is not possible to set up an individual marketing strategy or budget for every customer, but it is important to understand the sales cycle through which a customer will go before becoming a paying client. Digital marketing tools and resources should be included in the retention process.

Having Marketing Goals

Having a budget that can help catapult your business into the next frontier, as well as a strong digital marketing team, might seem redundant if you don't have clear marketing goals.

Before allocating any finances, consider what you want to achieve, and what type of financial resources will be required to do so.

Every quarter, as part of the marketing strategy, you have to define your marketing goals with your team members as this will give you a clear picture of where you are headed and what your business needs to succeed.

Assess Previous Strategies

Take some time to backtrack and see how you can improve in the future.

Assessing your previous strategies will reveal a number of questions.

  • What worked, and how much financial capital was available at the time?
  • How did I resolve previous problems, and was there any need for an increase in spending?
  • Which channels were more successful than others?
  • How much did I spend on digital ads and did it give me the return I was aiming for?

There is a chance that certain tactics worked for you in the past. Take some time to experiment with these strategies before committing to them.

Factor In Content Marketing Costs

One of the best ways to retain customers is through content marketing.

Although publishing content online is free, the cost of creating new content is what eats into marketing budgets.

While it is possible to hire an in-house creative to complete these tasks, business owners and entrepreneurs will need to consider the difference between hiring a full-time employee or paying a contractor. It's important to consider how much a job will cost, as well as how long it will take until delivery.

Consider Different Options

Businesses are often left with the difficult task of choosing a digital product that can be used to advertise their businesses.

Depending on the type of product or service you want to advertise, not every platform will work in the same way every time. The target audience, whether they use these platforms or not, will need to be considered.

Consider how you will be using each platform for different products or services as this will help determine how much financial capital is needed to boost content creation and digital ad spending.

Allocate According To A Formula

The 70-20-10 rule can be used to allocate money to your strategies once you have a marketing strategy.

The breakdown appears to be as follows.

  • 70% – should be allocated to marketing strategies that work for your business and the marketing goals.
  • 20% – should be spent on creating new strategies and developing new marketing tactics that can help your business grow.
  • 10% – is for experimental digital marketing, which is used to test out new strategies for the future.

If you give more priority to digital marketing strategies that were successful in the past, this will give you a clear indication of how much money to allocate to these types of strategies, according to experts. It is obvious that you should allocate less money to the strategies that didn't work in the past.

Additional Expenses

With the majority of the budget now being allocated to an overarching marketing goal, it is time to start taking into account additional marketing expenses such as website management, paid search, paid social media ads, paid keywords, graphic design costs, and video creation.

It is important to consider how much you will be spending on each in order to understand what the final costs will be. For the best results, research experts in your area to see how much they will charge for individual cases and projects, which can be used as an average figure in the final marketing budget.

Final Thoughts

It can be difficult to set up a marketing budget for a startup or small business, especially if you don't know how much money you need to boost marketing efforts.

It is important to consider your marketing budget against the overall marketing goals, as well as how your marketing strategies will drive more traffic and sales.

It will soon be easier to allocate the right amount of money for each segment of the budget if you have a clear idea of where you are going. Remember to overcompensate a bit in the first half as this will help you plan and save better in the future.

It was published first on Value Walk. You can read here.

The photo was taken by Pexels.