Jan 19, 2023

How to Optimize Your Organization’s Digital Marketing Budget

by Digital Marketing Institute

Whether your business uses traditional means to determine your marketing budget, follows current trends, or has a custom formula based on specific needs, there is a good chance that more of it will be allocated to digital marketing with each passing year. 

In our research into the evolution of marketing, we surveyed over 500 CMOs and learned that 58 percent of them are shifting their budgets from traditional to digital marketing. 

Depending on factors such as business type, size, and industry, the actual monetary amount of your digital marketing budget will vary, but you can learn from tips and techniques to optimize spend. 

In this article, we provide eight useful tips on how to optimize your company's digital marketing budget to get the best value and meet business objectives.

1. Determine What Falls Under the Digital Marketing Umbrella

If you are going to optimize your budget, you need to know which elements are considered 'digital marketing' and which are not. For many companies, if it's online, then it's considered digital marketing, but not every activity or service may fall under the marketing umbrella. 

By deciding what’s included and what’s not, you can focus on the right platforms. Some of the activities to consider include:

SEO (Search Engine Optimization) – Some senior marketers may not consider SEO or organic traffic a marketing activity, but it is a valuable tool when it comes to driving traffic and producing qualified leads. Check out some useful SEO reporting tools and a free checklist

Social Media – The people in your target market are likely to use social platforms like Facebook, Instagram, Twitter and LinkedIn, and social is becoming a massive source of qualified prospects for many companies.

PPC (Pay-Per-Click advertising) – This is often thought of as the gold standard when it comes to online marketing since you only pay when someone clicks on your ad, and you can target based on tight demographics. (Check out this PPC for eCommerce tracker to help with your campaigns)

Email Campaigns (inbound marketing) – A 'pull' rather than 'push' type of strategy, email marketing continues to be a valuable way to market to people online.

Digital Display (banner ads, online video etc.) – Modern banner ads are non-intrusive and targeted, and video is emerging as the marketing wave of the future.

Content Creation (website pages and blogs) – It’s easy to neglect content creation when thinking of your marketing budget, but creating great content is a critical part of the overall picture.  

2. Find Out Where Your Target Audience Spends Time Online

To optimize your budget, the first step is getting to know your customers better and understanding where they spend time online. This way, you can direct your resources to the appropriate places and maximize the return on your spending. The results of this kind of investigation often surprise marketers, as they might have assumptions as to where their ideal customer is active.

For example, if your company puts a lot of the digital marketing budget to leverage the power of LinkedIn, only to learn that most of your customers spend most of their time on Facebook, that's not an efficient use of marketing dollars.

By using analytics (like GA4) and advanced metrics, your marketing team can track where your target audience spends its time, how long they stay, and what causes them to leave. To gather this information it's necessary to create a persona of your ideal customer, so you know what you are looking for.

If you have a budget, then you should also have personas to work with. However, if for some reason that hasn't happened, create detailed personas of your ideal customer or client that include age, gender, job title, income, family life, hobbies, interests, and anything else that's relevant. Here's a buyer persona template to help you. 

3. Test Multiple Channels

Digital marketing can be a fickle activity, and what works for one marketer may not always work for another. 

Early in the budgeting process, your company should have established key performance indicators (KPIs), and by testing across several channels and comparing performance against your KPIs, you'll get a better sense of what is working and what isn't. You may find that you're getting a noticeably higher conversion rate on one channel over others or your cost per conversion (CPC) is quite a bit lower or higher on one channel.

Testing across multiple channels allows you to capitalize on opportunities and avoid areas where you're not getting worthwhile results. At this point, you can optimize your digital marketing budget by focusing on those channels that are providing the highest return on investment (ROI). In all likelihood, the 80/20 rule can be applied or possibly even 90/10 depending on your industry.

4. Cross-Channel Remarketing

Remarketing is easy to let slide, but also one that can provide a good return for minimal investment.

For those who don't know, remarketing or retargeting allows you to show ads to users who have visited your site or clicked on one of your ads but didn't convert. They have already shown an interest, and now your ads will show up as they look at other sites and platforms.

In the past, remarketing didn’t follow web visitors to different channels. But with cross-channel remarketing, someone can click on a Google ad (here's a beginner's guide) and then see follow-up ads on Twitter or Facebook.

Your organization can optimize your budget by giving prospects second and third chances to interact with your brand after their initial contact. And as with any PPC ad, you will only pay if the ad gets clicked on.

5. Examine Trends to Stay Competitive

Research what other senior-level marketers in your industry are doing will help give you an idea of the best ways to optimize your digital marketing budget.

In a survey of senior marketing executives and CMOs, 20 percent rate delivering a greater ROI on their marketing budget as the number one issue they face in 2023. 

That's not to say you should follow the competition precisely, but keeping in touch with what your competitors are doing online will give you a better idea of where you need to make adjustments to remain competitive.

For example, if a competitor has captured a significant market share or you want to capture it from them, learning where they allocate dollars and how they optimize their budgets will help determine your own budget.

Read our blog 'How to Do a Competitive Analysis in Digital Marketing' to help you size up your competition. 

6. Reallocate as Needed

Many marketers may view allocation and optimization as separate things, but in the digital world, a key element of optimizing your marketing budget is being able to reallocate as conditions change. 

For this reason, having a certain degree of flexibility in budgeting makes sense. Since results are often seen instantly, you'll want to be able to take advantage of opportunities as they present themselves or cut losses if a particular strategy is proving ineffective.

For example, let's say your customers are flocking to TikTok to post videos. This could open up a new avenue of paid advertising on TikTok or even content creation as you look to engage them on that platform. 

This is where a digital marketing budget toolkit can come in handy as you can adjust amounts as and when required. 

7. Continually Test and Refine

Optimization is an ongoing process, especially when it comes to digital marketing. With so many tools available to test and measure results, it’s important to keep testing even after you have decided on specific channels to focus your efforts. 

Even the smallest tweaks in a campaign can yield wildly different results. As an example, an email campaign could be producing a favorable ROI, and then a simple switch in the email sequence or a different type of subject line may boost it even more.

If the goal is to always get the most out of your digital marketing dollars, then your marketing team needs to keep refining the campaigns across all platforms and testing new ideas, strategies and concepts. 

Most of the time, a slight change in a campaign won't result in higher expenditure, so if it produces a greater ROI than before, you have effectively optimized your marketing budget with improved results. 

Check out 'How to Measure Social Media ROI' for information and tips. 

8. Ensure Sales and Marketing Are Aligned

Because optimizing your digital results will also help you to maximize your budget, it's essential to have the marketing and sales teams working together to accomplish your goals. 

With many online marketing initiatives, there is no direct contact with a member of the sales team, and purchases are made online. But if your sales funnel includes the sales team, then these must be aligned to convert leads into paying customers. It is only with a collaborative effort that sales and marketing can form a cohesive unit and get the results you need. 


There are many variables at play when it comes to setting and optimizing your organization's digital marketing budget, and these variables can change quickly and without warning. However, using these strategies should help to ensure your budget stretches further and is being used on the platforms that get results. 

Updated 2023

Understand how to make the most of your digital marketing budget

Digital marketing presents many opportunities to drive brand awareness and grow revenue. However, you need to understand the fundamentals, channels and tactics available to make the most of your budget. DMI's digital marketing course introduces you to the fundamentals and also covers social media, SEO, analytics, content, email, strategy and much more. Get started today to make the most of your budget. 

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