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Clearly, whenever you’re building a marketing plan, there are going to be budget constraints.
Now if you’re going to run an effective marketing plan, you’ve got to be able to understand your customers, you’ve got to be able to understand your market, you’ve got to be able to understand their needs, and there’s a significant amount of budget money and time that is spent in order to do that.
We talked about people and the importance of people, resource is always a constraint factor within any organization. It’s always a high cost factor within any organization, and having the right amount of resource to be able to deliver what you want is always going to be a constraint from a budgetary point of view.
One of the key activities of marketing is reaching messages out to the target customer in order to try to influence them. And the level of reach that you can achieve is always going to again be constrained by the amount of budget that you have to spend.
And this is before we even talk about effectiveness. As Lord Leverhulme, the founder of Unilever, famously said, “I know that half of my advertising budget is wasted, I just don’t know which half.”
So clearly there’s a recognition at the same time as marketing is facing budgetary constraints, there’s also recognition that not all of the money that’s being spent is being spent efficiently. So this balance of the budget constraint itself, and the amount of money you can spend and the effectiveness that you’re achieving for spending it, is a really critical thing for all marketers to try to focus on to become more effective.
There’s a number of reasons why it’s really important to understand how much it is that you’ve actually got to spend before you go into the development of a marketing plan and a marketing budget.
It’s also important to identify methods to maximize the ROI. And this is really about continual monitoring and continual adjustment. Again, marketers today are working in a much more fast-moving environment than they were even 5, 10, 15 years ago.
How can you do this?
Not everything you do is going to work, and in a digital environment, you’re going to find out relatively quickly what’s working and what’s not working. So your ability to adjust and adapt – pull spending away from certain areas, increase spending in other areas – is probably one of the most important things to do in order to maximize ROI.
In the pre-digital age, you could set your marketing plan and you could basically go away and come back six months later and see what results had been achieved. Now, you really can’t do that. You need to be monitoring it on a daily, sometimes even hourly basis, in order to see what metrics are coming back, how you need to adapt, how you need to adjust to get the most out of it.
You can you maximize that return on investment?
So determining benchmark data before the campaign starts is really important. What are you expecting to get? What have you got in the past? What have other people delivered in the past? What do you think? What does success look like before you actually start the campaign? So you actually have something to compare your results to. If your number of acquisitions has gone up by 5% as a result of running a campaign, is that a good number? Do you know if that’s a good number? Is it a good number compared with history? These are the kind of questions that senior management are going to want to ask and the questions that you need to have thought about in terms of your success rates before you get started.
How many people are you actually reaching and what kind of impact are you having on those people with the marketing activities that you’re implementing? Who are you reaching?
So what is that audience composition and what is that size? If you’re reaching a very large number of people but they’re not people who are in your target, that’s going to affect your conversion rate, that’s going to affect the number of people who are going to come into your business.
So where is the traffic coming from? Are there really critical referring sites? Are people coming to you through natural search? Are they coming to you through referral sites? Are they coming to you through blogs? Are they coming to you through social media? Really important, because that shows you which channels you want to be continuing to invest in or increasing your investment in or pulling your investment away from, in order to try and ensure that you’re bringing the right kind of consumers to your site.
So what proportion of people are you reaching, what proportion of people are coming to your site or your portal, what proportion of people are ultimately buying something from you? What level of conversion rate are you delivering? Is that differing by channel? Are you getting more through social? Are you getting more through research? Because that will help you understand not only the overall ROI that you’re achieving, but where is that ROI being most effective. And as we were saying before, you can then adjust much more effectively in order to ensure you’re getting the most out of your budget.
As we talk about advertising and human resource costs, there are kind of four main areas that many of you will be familiar with.
Let's examine the criteria which can affect the spend in terms of human resources activities.
One of the biggest challenges that people tend to face is that they become overambitious in the development of multi-stranded marketing campaigns with many, many different activities rapidly updating social media and email, and they simply haven’t got either the level of resources or the level of expertise to be able to deliver it. So what tends to happen is either it’s simply not delivered or it’s delivered with poor quality. And you’re far better off sizing your plan and sizing your activities according to the level of resources that you have, or alternatively make a recommendation for more resources if that’s what you need to be able to deliver the desired activity and marketing plan. But the relationship between those two things is really important not to forget.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.