A lot has been said about the importance of your digital marketing budget, but does a large budget guarantee massive returns? It is important to think about an issue that cannot be ignored, namely the money. Set your digital marketing budget to ensure the highest ROI. Ads are an exceptional tool for increasing business sales along with creating brand recognition.
How do you know you are getting the best bang for your buck? Advertising involves a lot of unavoidable expenses, and while a lot of campaigns are incredibly innovative and creative, it does not lead to more sales. The Digital Age has given rise to ad platforms offering some amazing models. Advertisers have paid for results like prospect details, clicks and even closed sales on e-commerce platforms.
Marketers of the New Age have seen advertising as an investment, not an expense. Invest in advertising so more customers can be generated. So if coming up with the perfect digital marketing budget has been hard, here’s what to consider while planning your advertising budget.
- Check Your Target Market
For the budget you have, you need to check the returns you are expecting. The calculation should not be hypothetical or random, but a realistic amount designed around what is being offered and who you are offering it to. So, cut to the chase. Parts of the budget connected to the market are important. You need to know the market in terms of its key demographics, such as age range, gender, occupation, interest, difficulties and limitations along with their favourite digital media.
Once it is clearly determined which niche market you want to reach, and which media the target audience is on, it is important to choose one that guarantees you the highest return on investment. Estimates and projections need to be made on conversions and scope. The real problem with traditional techniques is that it does not offer results, but these are difficult to quantify, predict and interpret. Calculating your ROI can get complicated if you don’t know which of your campaigns are working best.
- Review Needs and Priorities
The ideal budget for the ads should be unique, in terms of the product or service offered. This should not be at the cost of ignoring what the competition is carrying out. Analysis of companies or organizations similar to yours can yield an important industry standard. Allocate the right amount for each media, or how close one is to an industry average. While companies that invest more in advertising than average, others can spend less and get quicker results for this reason.
- Getting Real While Going Digital
According to eMarketer and Forrester reports from just 2 years ago, digital marketing budgets don’t exceed 30% of the total marketing budget. It is estimated to be around 40% and the numbers will rise in coming years. Relevant marketing channels can make a difference instead of taking the route your contenders do, in hopes of beating them there.
Kissmetrics has estimated that 5 most effective channels in 2017 were websites, email, social media, organic searches and paid searches.
Shortly after paid searches came advertising on mobile devices, surpassing traditional media like radio, television and newspapers. As per the Equities, set aside one third of the total marketing budget for covering advertising. PPC campaigns, ads on social networks, campaigns for generating leads or conversions, campaigns to create sales and more.
But the exact percentage should be in terms of what worked best for you in the past and choose the one that gives the best results.
According to eMarketer, the penetration of social networks is projected to keep increasing and ads on social media will get more successful as time passes. The most recommended social network for investing in is Facebook, and Instagram follows in second place and will see growth in coming years. Pinterest and Tumblr are next in line, though user percentages are lower. Despite the massive impact of social networks, channels that remain undefeated in terms of scope and popularity include Google AdWords.
- Deciding Your Ad Spend
Setting aside a percentage of your projected annual sales revenue is the best way to generate cash for your ad spend. Maximising your return on advertising spend every day is important. The standards range from 5 to 1. This means one should receive $100 for every $20 invested. By calculating the returns on annual sales, the success of your campaigns depends on evaluating your performance. Creating the advertising budget is so important. It helps you to avoid wasting money due to under spending or over spending. You also master the art of getting returns on your ad spend. You can find out if more capital is needed for taking your brand to where you want it to be and meet your business goals.
Advertising is not a cost. It is an investment and your most profitable one at that. Don’t play guessing games; hire an expert and find a marketing strategy that works. Marketers also face a quick proliferation of distribution and media channels. Change will render the way of getting messages across to audiences to evolve as well.
- Focus on Metrics That Matter
Marketing professionals considering the digital marketing budget focus on metrics and compare these to internal benchmarks to assess the effectiveness of ad copies. More precision in reach and frequency assessments has made media spending decisions better informed. The model works well for consumer product companies, such as Unilever, Coca-Cola and Colgate Palmolive. Share of voice thinking and up front media buys will impact inertia.
In a world of captive audiences and well-understood competition, the approaches perfected during the golden age worked easily. Priorities were established, risk was managed, and the impact of spending on customer attitudes was understood. Now marketing has become more complex.
The need is now to focus on building messages built on mass awareness or loyalty, for optimizing the spending across portfolio brands, and identifying segments responsive to different digital marketing initiatives. Consumers are hard and costly to reach. So, reflecting the present realities and utilising an online marketing budget that guarantees larger returns is the only option.