Building a digital marketing budget â€” or any marketing budget â€” can sometimes be an exercise in frustration for businesses.
On the one hand, many companies know that to make more sales and see more profits, they often need to spend money. But marketing can be slow to build, and the sales don’t always come as quickly as you would like.
And, in many cases, when times are lean, the marketing budget is the first to be slashed.
It’s also challenging when your marketing team is presented with many good marketing options â€” building SEO, inbound marketing, creating a regular social media presence, Facebook ads, Google ads, and more. While all of those initiatives can bring in new leads and opportunities, they also all cost money.
The solution to managing these competing demands is to build a digital marketing budget that scales.
A marketing budget that scales means picking the initiatives that meet your budget, but also provide the best potential for return on investment (ROI).
What does that look like in practice?
Consider the Short-Term
Many companies when looking at their digital marketing start with social media â€” they decide they want to be on Facebook, Twitter, and LinkedIn, and they want to post regular content to engage with their fanbase.
While this is a good goal and important for building brand recognition, it may not produce the most measurable return on your investment in the short-term. Even if you gain 10,000 followers, that doesn’t necessarily translate into $10,000 in sales â€” particularly depending on the price of your product or service.
A more profitable short-term activity (depending on your business) might be to do targeted solicitation in Facebook groups or on LinkedIn, where you can quantify the number of leads you are hoping to gain and the number of solicitation messages you need to send out to meet that goal.
This is also helpful for marketing departments who have to justify their budgets.
Consider the Long-Term
Services with less ROI potential are still important â€” but they may take longer to build. It can take time to get to 10,000 followers or 10,000 website visits, but in the long-term this can be an attainable goal, depending on your size and scope.
If you choose more profitable services up front, you can take the proceeds from those profits and roll them over into new marketing activities that take longer to propagate returns. Your marketing budget will grow, but so will your revenue.
Activities like posting to social media, responding to online reviews, and designing custom graphics are often necessary â€” but they don’t always bring in a justifiable return on investment. Responding to negative reviews won’t result in a direct increase in sales that you can prove, but not doing so can significantly hurt your reputation. They are qualitative, but not always quantitative.
Look for the Most Profitable Potential
As we recently wrote about, some businesses struggle with which products or services to promote first, or which buyer personas to target. The answer can be whichever has the potential for the quickest and largest profit.
For instance, if you sell products at retail and have a direct-to-consumer line and wholesale services, one wholesale order will likely earn more revenue than 100 direct-to-consumer orders. In this case, focusing on wholesale first might make more sense.
If you design websites, building out a $20,000 website would bring in more earnings more quickly than designing ten $2,000 websites â€” and require less internal resources, less sales times, and less marketing spend.
Going for the big fish up front, rather than the low-hanging fruit, can sometimes be the most lucrative. And then you can use the additional profits to increase your other marketing activities and build them up to the same level.
Set Progressive Budgeting Goals
When there is too much you want to try at once, the answer can be to set progressive goals.
If you have a Facebook page and want to start running Facebook ads, participating in Facebook groups, and posting original video content to Facebook â€” in addition to all of your other promotional activities â€” it might make sense to start with one activity and slowly add in the others.
Most marketing activities cost more upfront because you need to do the setup, planning, initial consultations, testing, and so forth. But once it is up and running, with a strong plan in place and oversight, the long-term spend may not be quite as high.
One way to plan progressively is to plan out the different setups over years. For example, in Year 1, you might build or re-design your website, launch social media presences, and start a a Google pay-per-click campaign. In Year 2, you might continue social media marketing and Google ads, while also planning and launching an Inbound marketing campaign. In Year 3, you might continue those services, while beginning to create custom videos.
Another way to plan progressively is by buyer persona. In Year 1, you might target Persona A and get that up and running. In Year 2, you might continue marketing to Persona A and also begin marketing to Persona B. And so onâ€¦
Internal marketing resources can often cost a lot for your budget. Two full-time staff at $40,000 salaries each would cost $80,000 per yearâ€¦ Whereas one full-time, salaried staff member would be only $40,000. You could then use the additional $40,000 to outsource digital marketing activities, which can cost less than having an in-house resource.
Outsourcing can be cost-effective and is a great way to scale your marketing budget. When you have more budget, you can grow your services. When times are leaner, you can decrease them. It also ensures that your digital marketing activities run no matter what is happening in-house.
For businesses looking for marketing growth, both in results and in profits, a budget that scales is essential.
Pulsion Marketing offers cost-effective solutions for businesses. We can help you develop a long-term strategy that offers the highest ROI potential in the short-term.
Contact us today to learn more. Call 1-888-701-4441 or visit www.digiforcemarketing.ca.