Many people believe that marketing is expensive, that digital marketing has increased the costs even further and the amount that each business has to invest, but here is the truth.
Your digital budget is dependent solely on your type of business and budget!
Coca Cola for example spends millions of dollars yearly on marketing and they use all methods of marketing including traditional and digital but their return on investment (ROI) is worth it because they make billions of dollars yearly.
As a general rule never spend more on marketing than you are making back because then you are not utilising these tools correctly.
So even if you spend $10 on your marketing and your return on investment is only $5 that means marketing for your business is expensive but if your marketing budget is 5 million but you make 20million back then your budget is very much justified.
If your marketing department is only costing you money it’s time to rethink the strategies they are employing and change them here are our tips on creating an effective marketing budget.
- Know Your Audience
I know we say this one a lot! The first step in digital marketing is…know your audience! The first step in creating a content strategy is…know your audience! And when you are creating your budget? You guessed it – KNOW YOUR AUDIENCE!
It’s important to know your audience because if you are selling to the wrong market even if you boost a post and 10,000 people see it if it’s not 10,000 of the RIGHT people then you are not only wasting your money but essentially is like trying to sell shoes to a snake.
- Set Clear and Achievable Goals
Do you want to increase brand awareness or increase sales on your website by 15% each quarter?
Knowing your specific goals and the timeline in which you want to achieve these goals is the first step in employing the right tactics and measuring their success.
At this point, you can find out what tactics you will employ to reach your goals. Let’s say you want to improve your Search Engine Marketing (SEM). This is the stage where you find out what keywords you would be bidding for and how much each Pay Per Click (PPC) would cost you determining the overall budget for that product or the geographical areas you are hoping to target.
You cannot begin creating your budget before knowing exactly where and how you are going to be spending the money in the first place.
- Find Out What’s Trending in Your Industry
Do you know where and how are the people in your industry spending their marketing budgets? Where are marketing dollars invested – offline and online? What marketing strategies and tactics are giving the best results?
You need to know what exactly your target audience is spending money on at that current moment and where are they spending it. What are people liking, sharing and engaging with the most? Find out which marketing strategies result in the highest Return on Investment (ROI)
Not only that, but find out what are your competitors investing in and what is working for them. Analysing what is trending in your industry allows you to eliminate the guesswork completely and this will save you a lot of money.
- Analyse Past & Present Company Trends
Ask yourself and analyse what marketing strategies have been working in the past and which ones haven’t. Where do you need to invest more money or what support do you need to take a fresh new look at your marketing strategies or maybe it’s time to employ a whole new strategy altogether?
Then, it’s time to sit down and crunch the number. Best practice states your total marketing budget should be about 5% and 15% of your total revenue. Digital marketing should make up 10%-50% of your total marketing budget, depending on your industry and yes, you guessed it – based on knowing Who are and Where your audiences are consuming their information!
In general, if you really want to get the most value for your money, you need to remember consistency and quality are the key to great marketing!
For more tips for your digital marketing career or business strategy, subscribe to our blog and enrol in our world-renowned Professional Diploma in Digital Marketing.
Bye for now
Nikolina
