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As many of you will know from Alice in Wonderland, if you don’t know where you’re going any road will get you there. So it’s really important to ensure that you got clear goals.
So, setting a goal, critical first step in any budgeting process.
Now, what kind of goals can you define? What kind of objectives can you define? Well you know we talk here about KPIs, key performance indicators. What kind of key performance indicators might you be looking at in a digital marketing environment to try and ensure that you can measure the effectiveness of your progress, and you can define the kind of goals?
So, important to define objectives in a balanced way across each of these areas, rather than exclusively focusing on one. If you just focus, for example, on something like sales, you may be acquiring more sales, you may be acquiring more contacts, but if you’re doing that with an increased cost, or you’re doing that at the expense of promoting customer satisfaction, for example, you’re over-promising and under-delivering, then actually you can be misled by one particular objective without being able to ensure that you got a properly balanced growth of your business overall. So having a balance of objectives is an important thing to take into consideration.
The second thing is to think about the frequency with which you might want to be measuring some of these objectives. And that’s really going to depend upon the business that you’re in and in the particular objectives that you’ve got. So think about things like the speed with which a business changes. Are you in an environment where, like FMCG for example where things can be changing very quickly, where things can be moving very fast; or even something that’s perhaps a little bit more slow moving, and perhaps a little steadier, like insurance? Where, perhaps people are buying annual contracts and then only coming back once a year to renew. Similarly, stock rotation. How often are you turning over the inventory that you’ve got?
Seasonality becomes a really important consideration here. So as you think about things like retailers, Christmas is a massive component of a retailers’ business, and therefore setting your goals, refreshing them with a certain frequency. That may happen much more tightly around a Christmas period, for example, than around other periods.
Bear in mind the timing of new product launches. Again, if a lot of time, effort, and investment is gone into launching a new product you’re going to want to think about, in the very early stages, what objectives, what measurement, how frequently are you going to want to understand whether that’s achieving its objectives? Everybody wants to know after new parts have been launched how successful has it been, how many have we sold in the first week, what impacts is this having on the rest of our business? So that will affect the speed with which you’re reading objectives, the type of objectives that you’re setting and reading relative to something that’s a more established product in the market.
Recognize that top-line budgets are usually set annually, but there clearly can be flexibility within those top-line budgets in terms of how you allocate them.
Analytics can clearly help in terms of making some of these decisions.
So you know, in a digital world, we’re talking about high-volume automated buying needs, particularly when you’re looking at things like AdWords, you’re talking about things like cost-per-click, you’re talking about things like ad-tech purchasing. Then automated buying tools are enabling you to have frequent performance analysis and regular budget reallocation, indeed, to the point where many of these things are now happening on automated basis. You will be familiar with many of the ad-tech solutions that will simply adjust the buying, right, adjust the cost-per-click, adjust the spend on CPM, in order to be able to deliver the best result. Algorithms that help to achieve that are increasingly prevalent and are helping people to be more efficient in the way that they’re making decisions on where they allocate their budget, what kind of data they get in order to make decisions, and how they used them.Back to Top
John Garnett is Managing Director at Bee Dance Consulting. He specializes in advising and helping businesses with strategy, marketing, and innovation challenges.
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ABOUT THIS DIGITAL MARKETING MODULE
This module dives deep into budgeting and resourcing digital campaigns to set them up for success. It begins by focusing on how to plan a digital marketing budget including the key budgetary factors to consider during planning. It covers how to maximize ROI for a given budget and best practices for recruiting and retaining key digital talent. It also covers topics on setting a budget, addressing campaign objectives and KPIs, timeframes, forecasting, organizational structure and systems, and supporting processes and software. Applying a budget is also covered, including specific topics on traditional media budgets, optimizing digital media budgets, digital media pricing, channel integration and attribution, and budgeting for creative.