So you’ve finally decided to become an entrepreneur. Good for you! Whatever your business is, you will most likely be advertising online. Any savvy business owner knows: before you do anything, it’s best to make a budget.
But there are so many avenues to online advertising that it’s easy to get overwhelmed. You want to be smart when you’re writing an eCommerce marketing plan. Here’s how you can create a budget for your digital marketing campaign.
Steps for Planning an Online Campaign Budget
1. Decide Marketing Goals
Before we even start: what do you want this digital marketing campaign to do? Are you trying to build an email list? Do you want to build brand loyalty? Or are we only trying to increase the bottom line of revenue?
Without clear goals, it is easy to lose focus and go over budget. Most businesses do not have the time or money to try everything and see what sticks. You need to zero in on your goals before you draw up a plan. Different goals come with different approaches.
For example, if your goal is to build a mailing list, Instagram ads will be a waste of money. If you are trying to build brand loyalty, opt for marketing strategies that give you access to analytics. That way, you can better serve your customers, which builds brand loyalty.
By starting with a clear goal in mind, we can determine what types of marketing strategies need to be accounted for.
2. Learn From The Past
Now that you have a clear goal in mind, let’s devise a strategy to achieve that goal. The biggest thing that will help you move forward is an audit of past performance.
While analyzing your past market strategies, keep a few questions in mind:
- What campaign tactics have I used in the past?
What was the return of investment (ROI) of each marketing tactic? Create a thorough breakdown of all past marketing tactics. This will create a picture of the most effective market strategy to attain your business’s goals.
- Which platforms drive the best results for my business?
Based on your set company goals, what platform did the best? This can be an easy thing to see if you’re looking for a quantifiable thing like revenue. Qualitative goals like brand loyalty can be a little harder to gauge. An increase in social media engagement or customer referrals can work as a way to measure.
- Which platforms do not perform well?
Knowing what doesn’t work is as important as knowing what works. Don’t be afraid to admit when a marketing strategy doesn’t work. By cutting ineffective marketing tactics, you gain more budget for better things.
- What marketing tactics have I not yet tried?
Savvy marketers need to be forward-thinking. Analysis of the past should always end with looking for new opportunities. What options have yet to be explored?
3. Analyze Opportunities to Grow
Once you complete the past analysis, it’s time to devise a plan. Look at your growth opportunities. You want to strike a balance between two types of marketing strategies:
- Marketing strategies that have proven successful in the past
- New marketing strategies
This way, you both focus on what has worked in the past and new ventures for growth.
4. Breakdown Company Needs
Now that we have defined goals and strategies, it’s time to look at resources. Specifically: how much money will you need to execute the devised strategies?
There are two main costs of digital marketing: labor and software. Your marketing budget needs to accommodate these. For example, if you want to have several social media pages, how do you want to do that? Do you want to assign one employee per page, or do you want one employee to run all social media accounts? If you want the latter, set them up for success by giving them a social media management tool like Hootsuite.
5. Distribute The Budget
Alright, ready for some real numbers?
General recommendations state a marketing budget should be between 7% and 15% of total revenue. Most businesses aim for 9-10%. Once you crunch that number, there’s your budget! Now that you have a number and detailed list of company needs, it’s time to start allocating!
Give the bulk of the budget to things that worked in the past, as long as they’re in line with business goals. Don’t forget to try at least one new marketing strategy per campaign. You want to always be creating new data.
6. Analyze Results
This process is not complete without follow-up! One of the best parts of digital marketing is you have constant access to data. Once you launch a new marketing campaign, it’s time for analysis!
Analytic software gives you the ability to see results in real-time. This means you can make tweaks to your campaign’s budget if needed. If a marketing strategy happens to be a flop, you can readjust the budget to prevent further loss. If one strategy happens to be a wild success, you can devote more resources to that. Always analyze everything.
Before you launch your digital advertising campaign, you need to devise a budget. With a bit of strategy, your online entrepreneurial expedition can grow!