Developing a budget for digital marketing is challenging for every business. In most cases, the Small Business Administration recommends that businesses spend around 8% of their revenue on marketing. However, any business owner knows that there are too many factors that can change that.
Fortunately, it's easier than you may think. Let's talk about how to develop a digital marketing budget that works for your business!
Determine Your Needs
What are the goals of your digital marketing campaign, and how will they see the best results? For example, if you're trying to build an SEO strategy from the ground up, you're going to need to invest more into it than you would after your first year. This is to optimize your website, launch a content marketing strategy, and build your off-page SEO.
There are plenty of other specific needs for a business's marketing campaign. You may want to:
Diversify your ad campaign
Grow your email list
Build a social media following
Develop an SEO strategy
Integrate existing marketing efforts
Also, you may have specific goals in mind, including building a brand, growing brand awareness, or building subscribers. Whatever these goals and needs are, write them down and communicate them with your marketing team.
Calculate Existing Costs
To create a marketing budget, calculate your existing digital marketing costs and revenues. Using your analytics tools, try to determine which marketing strategies are driving this revenue. This will help you determine where your money will be best spent moving forward.
Consider Your Future Budget
Like most aspects of business, spending some money now could save you a lot more later. Marketing is a perfect example of this.
Investing in organic marketing strategies may cost more money when you're relying on PPC ads. However, if you don't invest in these, you'll always rely on PPC ads. Spending money to build a social media following, SEO strategy, or email strategy will pay off in the long run.
While the general rule of thumb is to spend around 8% of revenue on marketing, it's okay to spend more if it's going to save you in the future. One of the best investments any business can make for its digital marketing strategy is web development.
There is no other asset of a business that affects every aspect of your digital marketing strategy like your website. This is where ads, social media, and emails attempt to direct traffic, and it's the entirety of your SEO strategy. Investing in your website now will make digital marketing more effective and affordable in the long run.
Take Changes Into Account
If you're planning for a 6-month marketing budget, you will have to account for special holidays and other promotions during that period. Many businesses run holiday promotions, so account for these if you plan to spend more during these busy times, especially for retail or eCommerce stores. If you anticipate any changes during your budget period, account for these added costs in your plan.
Plan for Improvement
Always plan for things to not go as planned because, well, nothing ever does. However, that's nothing to worry about. With the right planning and monitoring, you can easily make adjustments without breaking the bank.
To save yourself money on your digital marketing strategy, use the right analytics tools and closely monitor your campaign. Focus on improving your conversion rates to maximize the effectiveness and revenue from your campaign. Making adjustments over time will save a lot of money and increase your growth in the shortest period.
Other than conversion rates, the most important metric is calculating your ROI. If you find that you are overspending or underspending in one area, adjusting your budget accordingly in a timely manner is the best solution. Essentially, think of your marketing budget as a work in progress.
Create a Digital Marketing Budget Today
Now that you know how to develop a digital marketing budget, always think in the long term and plan for both the expected and unexpected. No digital marketing strategy is perfect, so calculate a marketing budget that works as a good starting point and make adjustments as needed.
Stay up to date with our latest digital marketing news, and don't hesitate to contact us with any questions or for help with your strategy!