Not every business has an unlimited digital marketing budget and nor should they. It is important to figure out how much you can afford to spend and then crucially decide how that budget should be distributed across your various digital channels  to maximise your return on investment (ROI). Your individual budget distribution will be unique to your business, but in this article the digital marketing strategists at Sierra Six Media advise on how you can manage that budget.

 

What a lead wants, what a lead needs to make you happy

The most important consideration for budget planning is the end goal. What do you want to achieve with your digital marketing efforts? Your marketing goals must align with your corporate goals. Once you have figured out your goals, you can start to think about budget and how best to maximise customer acquisition. The general term we use is leads, this can mean signing up for a service, booking an appointment, making an online product purchase, or sharing content.  

You should consider the following:

  • What is a good lead?
  • What can we afford per lead to spend?
  • How often do customers buy or interact with our products?
  • Are there many “touches” with a prospect before they convert?
  • Where do we ideally want our customers to be situated?
  • Who is our target market? What are the characteristics and demographics of our potential audience?
  • What is the current behaviour of customers on our site? Do we have issues with our website usability?

Once this has been established, you can begin to look at how those answers impact your decisions on what paid digital channels you should use and how best to distribute your budget.

 

Setting a marketing budget

An annual survey shows that the percentage of budget allocated towards marketing has been between 10% and 13% for the past eight years. This same statistic as a percent of total revenue ends up anywhere from 5% to 12%. This is then broken down into how much of that should be spent on offline marketing channels such as television, radio, magazines etc and how much should be allocated to online channels such as PPC, SEO and Social.

Once you know how much you have to play with, then comes the fun part, deciding what to spend where. It should be noted that an increase in budget does not mean an automatic doubling of traffic or conversions. It is about how you allocate your budget and the reasons behind it, which affect your revenue in the long run.

 

Website Traffic Generation

If you are running an e-commerce website, according to a study, search traffic generates about 65% of total e-commerce sessions, with 33% generated through organic search and 32% was generated through paid search. Other traffic might come from direct links to your websites and social media, blogs etc.

In a previous blog we discussed the four key areas for increasing awareness for your e-commerce business and they were: email marketing, paid advertising (PPC), SEO and micro-influencer marketing. These are now discussed below in terms of budgeting for them.

 

Email marketing

Email marketing is the channel that will likely require the smallest budget. If you have a large database of customers and potential customers, then this is an important area for your business as you can target potential customers more directly and this should lead to greater conversions. Scheduling correctly, having clear CTAs (Call to actions), a clear message and relevancy are some of the main ways to maximise your conversions from email marketing and making the most of your budget. Your budget will mostly be used to pay a mass email marketing provider such as MailChimp who will send the emails, track the clicks, analyse the ROI and schedule etc for you. The cost will vary depending on the number of emails you want to send and the size of your database. This is generally worth the cost and if email marketing is a key part of your strategy, then allocate a decent amount of budget here.

 

Micro-influencer/Affiliate Marketing

Finding an effective influencer to promote your product can be extremely rewarding and can see traffic and conversions increase. The Edelman brand trust survey states that the majority of consumers trust influencers much more than brands. This is, therefore, a useful way to increase your exposure and sales, without a large upfront cost as the influencers are usually paid per conversion or per post in some cases.

This does make it more difficult to budget for as you will not know the impact of different influencers and their posts. Working with an experienced agency can help you estimate the number of clicks and thus commission you might have to pay as well as figuring out what an influencer is worth for your business and who would be a suitable fit in terms of brand values, target market and, of course, budget.

 

Pay per Click (PPC) Advertising

If you are using Google Ads then there are a number of tools available to you through Google themselves that can help you figure out how to allocate your budget effectively through their platform. 

What you need to consider before that is how much you have to spend on PPC in the first place as well as on different social media platforms. PPC on whichever platform you are using needs to be managed closely as costs can spiral quite quickly. You need to ensure that your targeting is right, your platform choice is correct and that you are using Google Analytics to track what visitors do once they end up on your website. This is why it is often outsourced to an expert agency rather than trying to manage this in-house.

 

Search Engine Optimisation (SEO)

This is a paid for strategy in terms of time or if you are using (recommended) an outside agency to work on this for you. It requires a high level of knowledge of how websites work, how Google’s algorithms trawl websites and what search terms are used by your customers when looking for your type of product.

If there is space in your budget for the external help, this saves time for your in-house marketing team to work on other offline and online marketing channels and to build on the brand exposure. This may be at a higher cost than doing it in-house but a simple cost-benefit analysis will show that the traffic and subsequent leads that you will receive as a result will more than outweigh the costs.

 

Customer-focused digital marketing agency

Sierra Six Media are customer-oriented SEO, PPC and digital marketing experts who can help you maximise your budget and see your brand go from strength to strength. Call us today to arrange a free consultation.