Other than marketing managers and marketing experts, not many people understand how much money, time and effort goes into a digital marketing strategy. And developing a digital marketing budget is just one of the many daunting tasks we’re faced with as Marketing Managers.
Unfortunately, there’s no ‘one-size-fits-all’ digital marketing budget that any business can use. Our life would be a hell of a lot easier if there was!
Instead, each digital marketing budget is unique to every business. It depends on so many different factors, including company size, revenue, industry and competition.
If you’re scratching your head when it comes to working out a digital marketing budget for your company, you needn’t have worried! We’re here to help! Here are our top tips for working out a digital marketing budget…
Start With A Goal
Before going any further, you need a goal. Your marketing efforts need to be aiming for something, otherwise, you’re just throwing stuff at the wall and seeing what sticks (and wasting money!)
So, highlight what you want to gain from your digital marketing strategy. Perhaps you’re looking to increase brand awareness? Or improve brand loyalty? Or perhaps you’re trying to increase the number of customers? Maybe the end goal is to boost revenue? Maybe it’s a combination.
Either way, setting a goal is the best way to start.
Analyse Previous Marketing Techniques
Once you know the purpose of the digital marketing strategy, its time to analyse previous efforts. Look back on digital marketing techniques that have been used in the past and outline ones that did not work.
If you understand why they didn’t work and are confident that they are unlikely to work in the future, you can eliminate them from your strategy.
Then, highlight the digital marketing techniques that have worked well in the past, as these are likely to continue working for your business. Also, consider digital marketing trends which may crop up in the future.
Outlining the digital marketing techniques that work for your business is important as you’re likely to use them again and will have to factor them in when working out your budget.
Highlight The Digital Marketing Techniques You’re Going To Use
Have a look at what other companies within your industry are using to connect with their customers. Or what they use to build their brand awareness etc. This industry research will give you inspiration and a strong understanding of which digital marketing techniques will be successful for your business.
By looking over previous efforts and researching industry trends, you should have a good understanding of which digital marketing techniques work for your business.
Determine Annual Revenue And Total Marketing Budget
When it comes to working out your digital marketing budget one of the first steps is to determine the business’ annual revenue. You may need a little bit of assistance from the financing department or accountant.
The total marketing budget (including traditional marketing methods and digital marketing methods) should be between 12%-20% of your gross revenue if you are a new business. If you are an established business, your total marketing budget should be 6%-12% of your gross revenue.
Determine A Digital Marketing Budget
Now that you have your overall marketing budget, you can determine your digital marketing budget. Generally, this is between 30% and 50% of your overall marketing budget. However, this percentage varies incredibly depending on the business.
Some companies have all but stopped using traditional marketing techniques and only use digital marketing techniques. Whereas long-established companies still rely on traditional methods and are wary about trying digital marketing.
As the marketing manager, you will have the knowledge and experience required to determine how much of the overall marketing budget should be spent on digital marketing.
Research The Cost Of The Digital Marketing Techniques
Once you have your digital marketing budget, you can begin to research the cost of your chosen digital marketing techniques.
For example, if you’re using social media, you will have to determine which platforms you’re going to use and how much you’re going to spend on paid social media ads.
If you’re focusing on content, do you need to outsource your content creation to an experienced SEO copywriter? Do you need to contact an agency for help with your SEO? How much money, if any, will you invest in PPC?
Once you understand the cost of each digital marketing technique, you can then start to break your digital marketing budget down.
Break Down The Budget Based On The Cost And Need For Each Digital Marketing Technique
Breaking the digital marketing budget down and allocating the funds to each digital marketing technique is straightforward.
Always bear in mind that your digital marketing budget can be flexible. If your social media is doing exceptionally well at increasing brand awareness in comparison to another digital marketing technique, you can always move some funds around and re-allocate the budget.
Once you find what works best for your business, allocating the digital marketing budget is easy!
Monitor The Results Closely
Finally, remember to monitor your results carefully. The beauty of digital marketing is that you don’t have to wait for a year-end report to see what is working and what isn’t. Instead, you can monitor your digital marketing efforts regularly and make changes or adjustments if needed.
There are many free tools (including analytic software) available to help you keep an eye on your digital marketing efforts.
Get In Touch To Plan Your Digital Marketing Budget
Here at GrowTraffic, we are experts in all things digital marketing.
If you’d like some advice on working out your digital marketing budget or would like help with any of your digital marketing, get in touch here! Or call us on 0161 706 0012.
We help businesses of all sizes increase the traffic to their website through SEO, content marketing and brand consultation.