It seems like every day that you read about a new marketing strategy and how it enabled a firm to explode their performance. Yet, you don’t have the marketing budget necessary to try every new tactic that comes down the pike. Moreover, you can’t just try a new tactic without investing the time and other resources necessary to achieve meaningful results since most marketing strategies prove their value over time rather than driving an immediate change in revenue. That’s when developing a marketing budget plan fits in. Crafting a well-thought-out budget allows you to reach your goals with the smallest outlay of cash.
This reality drives our question for today: How do you allocate your marketing budget effectively so you optimize performance without breaking the bank?
Read on to find out!
Crafting a marketing budget plan
Set goals
Setting actionable goals is an essential step in ensuring that your marketing campaigns succeed. Goals direct the strategies you employ, as well as laying out metrics to assess performance, which allows you to tweak your campaigns to optimize goals.
In addition, the goals you set also help build your marketing budget plan as each goal maps to specific strategies with identifiable costs.
Among the goals you may set as a marketer include retaining a higher percentage of customers or increasing the average order value from customers, increasing conversion rate, or intermediate goals that generate a higher revenue over time, such as enhancing social media engagement, improving lead generation, and attaining an increase in your brand awareness.
Conduct research
After you set the right goals, your next step is to build an understanding of the digital marketing landscape. Focus on trends in your industry with a particular focus on tested campaigns and results. This research identifies marketing campaigns associated with high ROIs (returns on investment) as well as help with budget setting based on the costs others incurred in crafting a particular campaign. For instance, in the image at the top of this post, we show the results of a survey by Deloitte asking CMOs the percentage of their budget dedicated to marketing across various common industries. Research like this is invaluable in helping you set a realistic marketing budget and forming a marketing budget plan.
Some of the significant areas where you should direct your funds include analyzing where and how your competitors invest, keyword research, and understanding your audience. Besides, it would help if you learned about various costs such as how much it costs to hire a social influencer, create and produce content, and do email marketing. To optimize your marketing budget, consider outsourcing, especially as you learn the tactics involved and ramp up your marketing efforts. Here’s a comparison of hiring versus outsourcing your digital marketing to consider as you build your marketing budget plan. The main benefits of outsourcing your tactics to an agency, as you can see, are cost-sharing for talented marketing folks and expensive software.
Create a list of all the channels and tactics you plan to use for your next marketing campaigns. These channels could include:
- content marketing
- display, search, and social advertising
- social media marketing
- email marketing
- website optimization
- traditional advertising, such as radio or TV
- trade shows
- marketing materials, such as brochures
Next, estimate the necessary budget for each of these campaigns based on either your prior expenses or research.
Analyze previous campaigns
Have you had any marketing campaigns in the past? If yes, such campaigns help optimize your future marketing efforts. They act as sources of information you can use to guide decision-making, optimize the results based on insights, and developing your marketing budget plan.
Analyzing your previous campaigns gives you insights into areas you can change or improve as far as your budget allocation is concerned. Each campaign’s outcomes should help determine if you need to:
- put more effort into a given tactic based on a higher ROI, for instance, more money into list building if email marketing provides the highest ROI
- optimize performance by implementing changes suggested by your analysis, such as choosing the best CTA (call to action) or headline based on prior performance
- improve delivery based on learning which times and days work best for your specific target market
Build a detailed marketing budget plan
A budget is an essential element of success in any digital marketing campaign. Building a marketing budget plan often involves a build-up approach where you prioritize strategies and tactics with the highest ROI, although you must also consider intermediate goal performance, as elements that don’t directly contribute to ROI, such as engagement on social media, do contribute indirectly over time. After you have the information necessary to build your marketing budget plan you must make tough decisions about dropping certain campaigns as you don’t have a sufficient budget to implement everything you’d like.
An alternative, especially in the early days of your business, is to borrow the money necessary to implement your marketing strategies or find additional investment funds to ensure success by building a robust marketing plan.
Small businesses, especially new ones, often find financing a challenging, but necessary option and must rely on personal sources of funding such as an HDB loan to ensure you have the money necessary to implement your marketing budget plan.
Allocate the funds
Thus far, we’ve discussed ways to identify marketing areas that need more funding, quantifying digital marketing strategies that worked in previous campaigns, trends in the industry regarding marketing budgets, and you have actionable goals. Your next step is to allocate funds to the identified marketing plans and channels depending on the urgency and need.
Allocate the marketing budget across the various tactics you plan to use, based on your prior analysis and build detailed action plans including expenses for each element of the plan.
Monitor and measure the outcome of your campaigns
Allocating the budget isn’t the end of your work. How do you tell that a particular campaign was successful or needs improvement?
Besides the routine evaluations and check-ins, you need to track your marketing campaigns for success. Are they working as expected? Do you think you will achieve the set marketing goals with the campaigns?
By monitoring and measuring each campaign outcome, you get insights into areas that worked and tactics that need improvement. Being active in tracking and evaluating any campaigns launched is necessary as it helps you manage your marketing, but it is also a great way to learn what areas need some improvement. It also allows you to establish strategies that have the highest ROI. This data then feeds into next year’s marketing budget plan.
Final thoughts
Running a successful marketing campaign isn’t a simple process – it requires setting actionable goals, carrying out sufficient research, analyzing previous campaigns for improvement insights, and allocating the right amount to each marketing campaign effectively. As you prepare to launch your next marketing campaign, take as much time as possible to understand your marketing landscape and only invest in strategies and channels that reach your marketing goals.
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