We live in 2020, and digital marketing it’s on its prime. Online shopping is one of the most popular online services.
In 2019, global retail e-commerce sales reached nearly $3.46 trillion, and electronic retail revenue will grow to $4,48 USD trillion by 2021 approximately.
The importance of digital marketing is undeniable. In just 5 years, the gap between digital advertising and traditional advertising has dramatically increased.
Traditional advertising investment has dropped by single-digit percentages per year, while at the same time, digital marketing spending has grown by double digits.
The question on most marketers’ minds is, how do I plan an effective digital marketing budget that will see the best return for my brand?
The digital landscape is continually evolving and changing. Things that may be relevant now are likely to end in the form of old news next month. Therefore, many companies are reluctant to invest in digital technology because they do not immediately profit.
However, all savvy marketers know that a digital marketing budget is an investment that can bring stable returns.
Although it feels like you continue to incur costs from your pay-per-click campaigns or ad spend, consider that if you are only committed to a long-term plan, you can potentially generate huge revenues.
Building your brand, creating first-class content, and launching powerful email marketing activities are all valuable assets. These investments will bring you more potential business opportunities.
Know Your Goals
Set goals in detail. If you want to develop your brand, please consider implementing a strong content promotion strategy. Focus on expanding your influence on social media and building a robust cross-platform voice if you are more engaged.
Do you want to increase revenue or focus on sales? Are you planning to develop your brand? Do you have a strong influencer network that can drive conversions while driving social interaction
Next, find out the channels and customer touchpoints you can use to achieve your goals.
Which social media are the most relevant to your company? Abandon those inappropriate brands and focus on developing those that have the most impact on your brand.
Learn From The Past
Investigate how much money is invested in each digital channel and rank the success of these activities.
Take note of areas where the money is draining on campaigns that failed to generate leads and sales. Likewise, look into channels that were under-supported but saw posi&ve performance and revenue. Begin to consider your digital budget based on these findings.
It is also helpful to study the average marketing expenditure of business and compare it with your expected goals.
Know Your Brand
Unless you understand users and personalize their experience based on where they are on the consumer journey, you won’t be successful. For example, in the brand awareness stage, users who have been converted need to provide different content to customers.
Once you understand the target audience, you can begin to develop a content strategy. The ultimate goal is to keep your digital assets consistent with the target population. The more targeted the content, the more opportunity you have to maximize conversion rates, leads, and revenue.
Choose Your Channels
Different channels will attract different personas; it is essential to research the platform that best suits your business target audience.
You can save advertising expenses by pinpointing your exact markets and targeting ads directly to these markets, increasing the chance of getting sales tenfold.
What channels are most effective at attracting your audience?
A major change in the modern digital environment is that consumers will refer to multiple reference points before buying or dealing with brands. Reading reviews, making suggestions, using coupons, and comparing prices online are common practices among modern consumers.
From a digital marketing perspective, your brand needs to be everywhere, anytime. In a fast-paced, rapidly changing digital market, your brand’s ability to display on all devices will increase your chances of impact.
Mobile Is King
On average, a typical digital consumer now has 3.23 devices, but mobile phones and smartphones are regarded by users as an essential device.
In the current digital environment, optimization for mobile devices is necessary. People carry their phones daily; it is probably the first thing someone looks at when they wake up and maybe the last thing to do before falling asleep. By optimizing ads for mobile platforms, you have a tremendous potential to earn huge ROI.
Play Smart With Your Strategy
According to a survey conducted by the company Smart Insights, marketers view SEO, content marketing, and email marketing as the most effective digital marketing strategies with the highest ROI.
90% of organizations use content marketing and put 25% of their budget into it, that shows that these strategies require investment in most companies.
However, the platform you choose to use will largely depend on the direction of your business. What are your short-term and long-term goals?
Future Thinking Is Key
When establishing a budget, make use of the Goal-Setting & Forecasting techniques.
The digital marketing budget, like the annual budget, is an ongoing project.
The annual budget should also take into account all the factors that may affect the marketing activities of the year rather than merely changing the budget structure in previous years. Have you opened a new company branch? Do large events occur throughout the year?
The most important question to ask is here is how the marketing strategy is aligned with the company’s goals and how the budget will be used to achieve these goals.
Forecasting budgets will enable you to consider all costs without having to spend money that is not available and make you shrink back.
Track And Adjust
For example, paid search or social advertising requires frequent performance analysis, which may cause budget changes.
Because digital channels often fluctuate, staying on top of time and resource operations helps maximize value and get the best results. If there is a problem, make changes, and measure again. A successful budget is not just a matter of setting and forgetting the rest of the time.
Besides, marketers often make a mistake by measuring success based on the potential customers they generate rather than the actual impact on revenue. Although the campaign may be viral and attract a lot of people, in reality, few of these responses are converted into sales. Measuring potential customers does not provide you with information to measure how marketing works.
The 70/20/10 Rule
Every company’s marketing budget is different, but a useful starting point is to apply the 70/20/10 rule to the budget draft.
70% At least of the budget should be spent on what you know can bring benefits.
20% set on newer channels and innovations
10% The experimental part of the budget is for the most cutting-edge, unique opportunities that may lead you to success. Even if it fails, it is valuable to try new things and understand the reasons.
Track Your ROI
Anyone responsible for allocating and spending funds should have an easy way to understand whether their activities are generating business.
That is why return on investment (ROI) is an essential metric for any business.
Two leading indicators are used to calculate ROI: the cost of doing something and the ending results. The easiest way you can understand these numbers is to establish the ratio of revenue to marketing costs. The ratio indicates how much income is spent for every dollar spent on marketing.
Use ROI calculation tools to see if costs such as pay-per-click, display advertising, content production, and advertising agency fees are driving business development.
If you are ready to improve your website but do not have an in-house team to do it, Optimal Websites has a great group of experienced marketers that know how to tailor marketing campaigns for your unique needs. Contact us or browse our website for more information.