by Meghan Martinsen
With 2020 winding down, it’s time for marketers to start planning their budget for 2021. Digital marketing is an essential element for marketers because it helps them get their products before prospects. If shoppers search the internet for products that digital marketers provide but can’t find their site, they will lose sales to their competitors.
To be successful in their digital marketing efforts, marketers need to have a budget that factors in realistic strategies. Whether one has a small business, large business or startup, everyone’s goal is the same: to market their products and services to consumers. Having a digital marketing budget is a proper step towards achieving profit goals.
Here are five strategies that digital marketers can use to prepare their budget:
1. Having a Goal
The first step in preparing a digital marketing budget is having a clear goal. A marketer needs to know what he or she intends to focus on next year. It could be building brand awareness, increasing his or her customer base, acquiring new customers or helping the customers they already have.
Knowing what one intends to achieve beforehand determines the amount of budget that is set. Also, one needs to set goals that are specific and smart. A goal should not be general like “increasing sales,” but should be specific like “increasing sales by 20 percent.” Having a measurable goal gives a marketer a precise target to work on.
Because a business owner may have many goals, it would be best for them to prioritize the goals in order of their importance because executing everything may be expensive. Marketers can do that by selecting tactics and campaigns that would enable them to acquire more profit than that of the previous years. If one isn’t sure how to prioritize his or her goals, a marketing agency can help them do that.
2. Establishing a Sales Cycle
When planning for a digital marketing budget, one needs to establish a sales funnel. This is a crucial component in the budgeting process because it determines where a marketer will spend their money. A standard sales funnel has four stages:
- Awareness
At this stage a marketer’s audience becomes aware of their problems and tries to find solutions.
- Consideration
In this stage the audience looks for options available for them.
- Decision
Here, the audience starts to narrow their focus on brands that can provide the best products or services for their needs.
- Action
The audience chooses a marketer’s business and purchases products or services from him.
Having a sales funnel will help a marketer know where to spend more money to keep potential customers from falling out of the funnel. For example, if a marketer realizes that their company’s funnel has more consumers at the consideration stage but few at the decision stage, they can decide to invest money in strategies that will take their customers from the consideration stage to the decision stage. Such strategies may include social media ads, video marketing and pay-per-click. Therefore, knowing one’s sales cycle can help to shape his or her digital marketing budget breakdown.
3. Auditing Past Efforts
Before preparing a digital marketing budget for the next year, marketers need to conduct a postmortem. In the postmortem, they should look at the strategies that were successful, the ones that didn’t work, and the ones that showed a promise to work in future. They can measure success through the number of email subscribers, retweets, and leads that they received from their marketing efforts.
After auditing and finding out what worked well for them, marketers can chart a way forward. The way forward may be to increase expenditure on the strategies that worked well, and those that gave a promise to work well. Marketers can also either cut off the budget for projects that didn’t work well or figure out how they can improve them. Besides that, they also need to set aside some amount of money for experimenting new strategies. Most marketers keep about 20 percent for new things.
4. Understanding the Market and Competitors
While it’s unethical to copy a competitor’s strategies, one needs to factor in market trends as they budget. He needs to know the channels that other companies are using to stay in touch with their customers, compare his ranking with that of his competitors, and spy the advertising techniques that his competitors use to reach customers.
If a marketer finds out that there’s a tactic that their competitors are using to generate leads, they can consider that in their budget. Also, learning from the competitors’ mistakes can make their brand stand out. Understanding where one is compared to the competitors can help establish better strategies to compete with them.
Knowing one’s position in the market should also help one set short-term goals. When a marketer knows how similar or different the company is from that of competitors, they can plan specific channels, tactics and avenues that can help the business to stand above the competition.
5. Researching Strategy Prices
Marketers need to know how much it would cost them to finance each digital marketing strategy. Here’s a breakdown on how they can do that:
- In-house
If a marketer is planning to use the in-house team in digital marketing, they should budget for salaries and materials needed for campaigns. They may need to hire other people to help, therefore, it’s important to also set aside an amount for that.
- Digital Marketing Company
A marketer may need to plan for a monthly pay off if they intend to hire a digital marketing company to execute services and campaigns. Knowing the costs that one would pay for each strategy can help to prepare a comprehensive budget. It will also assist to know which strategies to spend more money on to achieve success.
Planning for a digital marketing budget is a vital element for marketers. Apart from helping them know how they’ve performed in the previous years, it enables them to plan on the amount to spend. Marketers who don’t work with budgets may risk failing in their marketing campaigns. On the other hand, those with budgets get new insights and tactics that they can use to make more sales. These strategies can be used by any digital marketer to revamp the brand or business.
Meghan has nearly five years of experience creating high-quality content for a variety of different platforms and mediums, and recently, collaborations with content writers at RizeReviews. Meghan started her career as a content editor for a local magazine talking about lifestyle and fashion. Due to her rich digital marketing experience, she likes writing about SEO, online reputation, and various digital marketing strategies to help startup businesses. Meghan spends her free time reading a book or spending time outdoors with her family.