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Marketing managers often sacrifice in between 7% and 10% their corporations’ revenues for marketing. At least apart from that 72% of the entire marketing budget goes to digital marketing channels.
Spending on digital marketing is also growing, increasing by approx 11.1% from the first to the third quarter of 2024. Misallocating these budgets will be costly, time-consuming and demotivating.
The excellent news is that even in today’s choppy economic waters, there are ways to spend your digital marketing budget optimized for efficiency while still providing comfort to your customers. Check out the three specific steps I follow for any marketing budget.
1. Identify the right marketing tactics
At my company, one of the tests we give marketing candidates during a job interview is to ask them about a specific scenario. For example:
You have a guy who owns a toy store in New York. He opened his first online store and wants to sell toys online. It gives you three months to show you can sell toys. And if you possibly can sell toys, he would increase his budget and commit to a 12 months.
Now, what marketing tactics would you utilize to be certain that the customer sees results inside those three months? It is vital to note here that some marketing tactics won’t be effective for him because:
- First of all, this is his first e-commerce store, so he doesn’t have a newsletter list, so the newsletters won’t work instantly.
- Secondly, it’s a brand recent website, so search engine optimisation would take way too much time. This guy wants to see results instantly.
We’re all the time looking for marketing candidates who understand this. search engine optimisation would not work instantly because it takes over six months to create a recent website. Newsletters are also not profitable. Organic social also takes too much money and doesn’t immediately drive sales.
Given all these requirements, there are at least three viable channels here.
- The first is ppc, or PPC.
- The second is a paid social networking site that is geo-targeted.
- The third one is influencer marketing, i.e. affiliate marketing.
Here are the three channels that are best for this particular situation because the guy has a brand recent e-commerce website. He wants to see results instantly before he decides to increase his marketing spend.
PPC campaigns will allow the client to reach individuals who are actually looking for toys on the Internet. This can immediately increase traffic to their store as PPC often results in: 200% return on investmentaccording to Google.
In the same way, paid social networking sites allow you to goal ads to different sites. Finally, influencer marketing, especially those trusted by families and parents, can increase brand credibility, which is vital for a growing e-commerce store.
2. Start smaller and optimize your channels
If you are marketing for a client who has a $120,000 annual marketing budget, you do not just divide it into $10,000 per thirty days. We also don’t start by straining the budget at the same time.
We start with a smaller budget. In this case, you may start with a lower amount, resembling $5,000 per thirty days. Then we will start with PPC and paid social media. You test channels and optimize them.
Even if a client says they have a budget of $10,000 a month, we do not tell them it’s $10,000 a month. It’s silly, naive and inexperienced. Instead, we tell the client, “Let’s start with $5,000 a month. Let’s start with one or two channels and use the results to see what works and what doesn’t.”
Depending on the performance of your channels, even if you begin at $5,000 per thirty days, you possibly can find yourself at $15,000 per thirty days by the end of the 12 months.
3. Monitor your results and increase your budget
Show your client the results for your chosen channels. Only when they see the results will they feel more comfortable and then the budget and channel amount will probably be increased.
This is also the moment when we will consider adding additional channels. For example, you may add search engine optimisation that takes months to see results. Once you add this, let’s push the results back to the customer and then increase their marketing spend once they see the results.
The bottom line is that you have to have a minimum amount to spend in the first step. But make sure for the first few months you begin smaller, pick one or two channels, optimize those channels, show results for those channels, then increase your budget and then add one other channel.
If you are a greater brand and have extra money, you should utilize more channels at once, but best practice still applies.