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Marketing and promotion are just about as old as capitalism itself. From the very beginning, we've had people in market squares shouting loudly to promote their wares or posters plastered on walls to talk about new products.
Today, we have the internet and internet-ready devices in customers' hands; everything is connected to the internet and ready to pull up information.
So it’s become pretty clear for the modern, 21st-century business to dedicate some portion of a marketing budget to digital efforts. After all, you have to go where the customers are, and to ignore the online landscape is to cut yourself off from a potentially global audience.
According to our 20/20 Vision: A Marketing Leader’s View of Digital’s Future report, 95% of these organizations have increased their digital marketing budget in recent years, and 9 in 10 marketers expect their budget to continue to grow by 2020.
We're going to take a look at your digital marketing efforts, and show you how you should be thinking when it comes to allocating your budget and making sure it's effective for your resources and your digital plan.
Set the Goal
One of the most critical initial steps in figuring out a digital marketing budget is solidifying a clear, concrete goal or goals. You don't want to take a "throw everything at the wall and see what sticks" approach since that will waste both time and money.
Instead, what you should be aiming to do is decide where you want to see your results. That may mean a single result, or it may mean a primary goal with secondary and tertiary objectives. In every case, however, you must know what you are trying to achieve. Are you looking to boost brand awareness? Create more brand loyalty? Are you merely interested in increasing revenue or customers?
These are all very different goals, with different approaches, so which ones you choose to pursue will have a big effect on your digital plan, and how you should be budgeting.
Analyze the Past
Another step you need to take when it comes to digital marketing is to see what has worked and what has not. That applies both to the efforts of peers and competitors, but especially for your own efforts.
If you've already had some experience with digital marketing, then look closely at what your results have given you. Where have you experienced success and why? Which efforts did not work for you? Do you know why they didn't work for you, especially if these were techniques that did work for other businesses? Knowing what worked and what didn't, and, most importantly, why there was success or failure are vital pieces of the digital marketing puzzle that you'll need if you want to move forward with your next effort.
Allocate Based on Success
Once you have a goal, and you have an idea of what's been working and what hasn't, you can start breaking down your budget based on priorities and success. The key word here is "success," not cost. For example, social media may not actually cost you anything at first since there's no expenditure to create a social media account or make posts on it.
However, if the analysis of your past digital marketing efforts, or that of others, shows that building up brand awareness works very well on a social media account like Twitter, you may want to give social media planning a budget when it had none. After all, if your social media account was working well for you when you only had a few staff members making the occasional post, how much more effective could it be with a social media account manager or the right social media tools and software to more fully take advantage of it?
In the same way, if it's clear that your demographic is moving away from Facebook and is now on Instagram, and you see less satisfactory results in your Facebook advertising, why continue to give it a priority? Shift the budget away to something that is getting you better results, rather than keeping the money in place for a technique that data has revealed is not working for your needs.
Look to the Future
Techniques that have worked before are important to keep in mind, but just as important is keeping an eye on the future. If it's not your area of interest, dedicate some staff or other specialists to keeping you apprised of the incoming trends. Current trends in digital marketing are critical to watch for, but if the business analysis points to new opportunities and venues, always be aware that getting in early and having "first-mover advantage" can be a huge benefit.
So it’s not just enough to know that “Instagram is in, but Facebook is out for younger demographics," for example. If you or your staff are hearing news about new social platforms or services, such as Twitch streaming coming to the fore and creating a new, unsigned legion of KOLs (key opinion leaders), you should not ignore these future opportunities for marketing.
Breakdown Your Requirements
Now that you have a much better idea of what your goals are, and what forms of digital marketing you want to use to achieve those goals, it’s time to start setting aside some numbers for the specific resources you’ll be needing.
Digital marketing is, of course, about the combination of two distinct resources: tools/software and manpower. You need to start looking at how your own budget will accommodate these. For example, if you want to take advantage of Twitter, Facebook, and Instagram for your social media marketing, do you want to have dedicated staff for each channel or assign one staff member to handle all the social media. If it's one staff member, how much time should that employee spend on social media?
If you want that employee to be as efficient as possible, you may want to look into a tool like Buffer. It allows a person to create—and schedule—posts so that they are put up at appropriate times, rather than having a person create a post and then wait until the right time to manually put the post up.
If you know that you want more detailed information on how your efforts are going, then you may want more in-depth analytics tools so that you or your staff get better information about what's working and what's not, with the numbers to back it up. The Moz service, which is one of the industry leaders in search engine optimization—or SEO—might then need to be added to your list of tools.
Plan Your Content Creation
One area where there is always going to be a need is content creation. But the type of content being created varies wildly depending on your business, needs, and goals. In-depth articles and blog posts, for example, can still be an essential part of marketing, especially for more service-related industries, where customers want detailed information in order to make a decision. In this case, you'll need to budget your digital marketing towards writing experts or authorities to create that content and specific KOLs.
On the other end of the spectrum, businesses that are more product-based might benefit more from video content. That, of course, is an entirely different skill set, despite the importance of the content itself. So, budgeting would need to account for recording equipment, editing equipment, presenters or writers depending on your ability to provide these yourself, and other factors.
Choose Your Platforms
Another important consideration in your marketing is which platforms you will choose to be present on. Again, this is highly dependent on your business and the market that you cater to. If you're more of a business-to-business enterprise, and you'll be appealing primarily to decision-makers at the management level, such as CTOs or CFOs, you're probably going to be creating content that is meant to be consumed in the office, on a desktop or laptop computer. It's going to be content that appears as articles or on dedicated websites.
On the other end of the spectrum, if your business is more retail and public-oriented, there's a good chance that what you offer is going to be consumed "on the go" with people on portable platforms like phones and tablets. It may also mean that your choice of delivery is going to use videos or photos posted on social media, so this once again changes your budgetary concerns.
Monitor Your Results
One of the best aspects of digital marketing is that you don't necessarily need a year-end review, with information compiled by a research firm, to tell you how effective your marketing techniques have been or where your money is well spent or wasted.
With the proper analytics software, you get all the results you need and can begin monitoring the effectiveness of your own efforts. Take advantage of this to see how your marketing is doing. You may even be able to make minute adjustments while campaigns are still in progress to get even more effectiveness out of your efforts.
As always, planning and a willingness to look at the data impartially are keys to success.