It’s simple to ignore digital marketing services and concentrate on other parts of the company. Some business owners may believe that this is the most sensible course of action in order to stay afloat. How can they sell a product or service if they can’t supply it?
Digital advertising costs (Search, Banner, Video, and Social Media Advertising) are predicted to reach $638 million in the Philippines. As a result, more and more firms are investing in digital. Why shouldn’t you do the same if they’re making an effort to maintain their online presence?
You don’t have to completely abandon your digital marketing strategy. It’s just a matter of understanding how to properly calculate your digital marketing budget.
This article will give you tips on how to ensure that every dollar you spend on digital marketing services is spent wisely. As a result, you’ll be able to reap the full benefits of being present in the digital world.
A Few Things to Think About When Planning Your Digital Marketing Budget
There are a few things to consider before diving into the numbers and evaluating your digital marketing costs.
What Are You Trying to Achieve With Your Marketing?
The most crucial thing to consider before spending is if the expense will be worthwhile. This is why you must first assess your entire marketing objectives before allocating funds to your initiatives.
Knowing what your objectives are can assist you in determining how you will achieve them. As a result, prioritising which digital marketing methods to adopt becomes easier.
Here’s an illustration:
Through digital marketing initiatives, your marketing goal is to improve the number of leads by the end of the quarter. How are you going to get there?
Your digital marketing plan may include the following elements:
- SEO services include improving your website’s on-page performance and link building.
- Content marketing is the process of creating high-quality content that entices your audience to visit your website.
From there, you may further break down the tactics into activities that will have the desired effect. This way, you’ll know how many hours each activity will take, who will be in charge of it, and how much of your company’s resources will be devoted to it.
What Digital Marketing Initiatives Have You Previously Implemented?
It’s not just about looking ahead when deciding how much to spend on your digital marketing strategy; it’s also about looking back to see how you got to where you are now.
Analyzing your prior methods will help you determine which activities were successful and which were not. This will keep you from wasting money on digital marketing campaigns that don’t have a significant impact on your company.
Make a quick assessment of the tactics you used:
How did the previous digital marketing initiatives perform in terms of return on investment?
- What digital marketing methods consistently produced the best results?
- Which digital marketing methods are most relevant to your current objectives?
- What digital marketing methods didn’t help your website gain traction?
After you’ve completed your assessment, you’ll be able to decide which methods to invest in and which to eliminate from your digital marketing budget.
Pro-tip: It’s ideal to evaluate your digital initiatives on a quarterly basis, especially if you’re performing SEO, because results take time to materialise. By analysing your website’s quarterly performance, you can determine whether your SEO efforts are yielding results.
What Was The Outcome Of Your Digital Marketing Campaigns?
This can assist you in establishing a benchmark and get more specific information about how much you can spend on your next marketing campaign.
Assume you generated 1000 leads through your SEO strategy, but only 100 of them converted. You have a conversion rate of 10% based on this. We’ll return to this example later in the article.
Knowing the results of your campaigns can help you establish more realistic goals for yourself and connect them with your marketing budget.
How much money do you make in total?
The most crucial item to consider before deciding on a marketing budget is whether or not you have enough revenue to support it.
While the money generated by your digital marketing efforts is linked to your company’s performance, it also works the other way around. You can attain the outcomes you want by allocating a portion of your revenue to your digital marketing efforts. B2B companies, on the other hand, spend 12.3% of their total sales on marketing.
Examine your gross sales and forecasted revenue to determine a reasonable marketing budget for your company.
How to Make a Budget for Digital Marketing
When deciding on a strategy, how do you justify your digital marketing costs? Is there such a thing as a magic number?
Let’s break this down into sections so you can properly allocate your digital marketing budget.
You can do digital marketing in-house or hire someone to do it for you. In any case, you’ll be paying for the knowledge.
Digital Marketing (In-House)
If you decide to do it in-house, you’ll need to figure out how many corporate resources you’ll need (we’ll go over this later in the post), who will be doing the work, and how long each task will take.
It’s critical to keep track of the time it takes to accomplish the assignment because this will allow you to compare each contributor’s hourly compensation to your overall marketing budget.
Digital Marketing Outsourcing
Outsourcing digital marketing services, on the other hand, relieves you of this level of granular supervision. If you opt to outsource SEO, for example, you can look for an agency that can take on the work.
Most digital marketing organisations offer packages or service tiers that are tailored to a company’s budget. Examine your options to determine which digital marketing solution best fits your marketing budget.
Digital Marketing Tool Costs
The beauty of internet marketing is that with the correct technology, you can track every attempt. While there are numerous tools accessible for both small and large enterprises, you won’t be able to use them all. Instead, not everything is required. So, which digital marketing tools should you include in your toolkit for your company?
This can be broken down by function:
Tools for measuring performance
Google Analytics and Google Search Console are the most basic internet marketing tools you’ll need. The best part is that they’re completely free. Premium tools such as Ahrefs and SEMRush, on the other hand, are required if you want to track your business’s online performance. This type of tool might cost anywhere from $99 to $1000 per month.
Tools for email marketing
You’ll need an email marketing provider for promotions, service updates, and any other type of communication that encourages conversion. Depending on the features and volume of email marketing activity you want to cover, email marketing solutions can cost anywhere from $10 to $200 each month.
You name it, and there’s an SEO tool for it. Keyword research, website audits, link building, on-page optimization — you name it, and there’s an SEO tool for it. Some are free, but others will require you to allocate funds to your marketing budget in order to gain access to premium services.
If you’re handling your digital marketing in-house, some of these tools’ subscription plans will eat into your budget. If you outsource the task to a digital marketing firm, you won’t need to subscribe to these tools because they’re almost certainly already using them.
Let’s return to the preceding illustration. In the coming quarter, you want to quadruple your current client base and attract 100 new ones.
But how much will it set you back?
Let’s say your prior digital marketing campaign cost you $2000. Subtract the total number of consumers you had from the total number of customers you had.
For each new customer, your cost per acquisition is $20. If you want to add 100 clients to your current benchmark, you’ll need to increase your digital marketing expenditure to $4000. What Is The Best Way To Plan Your Digital Marketing? Use your money wisely.
When it comes to digital marketing costs, it’s simple to deflect the topic and shift the focus to something else.
However, if you look at the broad picture and know your figures from the beginning, determining how much to spend on digital marketing techniques will be simple.
Here are some suggestions to help you stick to your budget:
- Focus on your strategies,
- Laser: If you have a good strategy in place, nothing goes to waste. If you’re going at a haphazard speed with your marketing, you’re not going to get far. Everything has to be in sync.
- Keep an eye on the latest industry developments: As useful as internet marketing can be for organizations, the digital world is constantly changing. This implies you’ll need to be aware of what’s going on in the sector.
- Experts to trust: It’s critical to understand the conflicts you’re capable of fighting. If you’re new to digital marketing and suspect you’re wasting money on self-managed initiatives, it’s preferable to hire a professional to prevent squandering your budget and resources.
Key Points to Remember: It all boils down to how you spend your marketing budget.
In the end, it’s less about how much money you’re going to spend on digital marketing and more on how you’re going to spend it.
Always keep these guidelines in mind when calculating your digital marketing budget:
- Familiarize yourself with your marketing objectives and goals. Examine prior digital marketing strategies to determine how they performed and affected your objectives.
- Investigate the costs of your assets. What are your plans for investing in expertise? Are you planning to pay for premium tools?
- Know your numbers. Establish a baseline for your marketing activities at all times. Begin by calculating how much you spend on each new customer (Cost per Acquisition).
With the digital transition now complete, having the appropriate strategy will put your company ahead of the competition. Make sure you’re investing in initiatives that will yield the best returns for your company.