Digital Marketing is the most cost-effective way to reach the target consumers. You can engage an enormous audience which is hard to tap with other traditional marketing methods. Plus, you can influence customers for less money and get to know your buyers. The best part is that you let the users connect with your brand. Thus, you not only get customer loyalty but also measurable results.
However, allocating a budget for digital marketing is the crossroads of should and must. Especially for small businesses and start-ups, who often have no idea about it. So, for businesses that do not know how to calculate digital marketing budget, do not worry. We are here to make things easy for you.
This article covers the basic steps that you must consider in allocating a budget for digital marketing.
What Do Experts Recommend?
Most experts are in favour of allocating just about 10% budget to marketing. And of this amount, around 50% of the budget you must allocate to digital marketing. The value also depends on various other factors which we have discussed in detail.
How do you calculate the digital marketing budget?
Follow the below steps to know how to allocate a budget for digital marketing. This way you can break down the cost and will be able to calculate your digital marketing budget.
Prioritize Your Goals
Sales are always the main and primary goal for any business. However, the path you follow to achieve this objective may differ. It also depends on whether you want to grow sales strategically or in tactical terms.
Advertising campaigns (Facebook ads or PPC) can instantly boost sales. But if you are a growing brand, you need to follow the strategic approach. This includes creating awareness and brand recognition among the audience. So, you will have to prioritize the goals between boosting sales and improving brand awareness.
Breaking Down into Multiple Tasks
Once you have prioritized your main objective, you can further divide it into sub-goals. This will help you decide what exactly your brand need. Plus, your team will always be focused on the main tasks.
1) For Sales:
If your main aim is to boost sales and increase revenue, focus on the following sub-goals.
- Creating a sales funnel
- Expanding website traffic
- Retarget lost visitors.
- Improve conversion rate.
2) For Brand Awareness:
To create brand awareness on digital media platforms, consider the following tactics.
- Improve content sharing practices.
- Grow social media followers.
- Increase ad impressions.
- Engage audience on social platforms.
Divide up the main objective into different tasks that will improve your strategy. You will have a clear mind about your priorities. Moreover, you can determine which digital marketing strategy is important for your business.
3) Simplify the Details:
Once you are done with breaking down the main goal into tasks, consider your options. Decide what are the best possible ways and platforms to achieve what your brand or business needs. For example, if your goal is:
- To Increase Brand Awareness
Post relevant content, share viral content, boost your posts.
- To Improve Conversion Rate
Design a sales funnel, improve the UI/UX of your brand, or add new category pages.
- To Boost Website Traffic
Do email marketing, focus on social media, and SEO.
Following this practice will help you simplify the digital media strategy. Your team will know what it needs to do to achieve its goals. Also, your business can focus on activities that are more important and can be more fruitful.
4) Consider Your Options:
Not every digital platform is right for every business or start-up. You must consider your options depending on the nature of your business and marketing goals. Selecting the right channels will also help you decide the best activities and the right content form.
Below is the list of some of the best digital marketing activities and channels. You can focus on just one or more digital marketing approaches.
- Search Engine Optimization (SEO)
- Paid Search (PPC)
- Display Advertising
- Content Marketing (blogs, guest posts, etc.)
- Email Marketing
- Press Releases
- Video Marketing
- Conversion Rate Optimization
- Social Media (Pinterest, Instagram, Twitter, Facebook, LinkedIn, YouTube, and other platforms)
5) Find or Follow:
Now that you know what you must do, let’s focus on how to do it. You can either create your own strategy or follow your competitor. The former requires extensive research about your target audience whereas the latter will involve careful planning and approach.
The first thing you must do is discover the right digital marketing platform that suits your business. Find out where your target audience hangs out on social media. Also, which platform matches your brand identity and services or products. Secondly, do competitive research to explore the digital platforms that your competitors are using.
6) Time to Allocate Budget for Digital Marketing:
After finding the right platforms and activities, allocating a budget for digital marketing is the next step. However, you must take steps after considering your marketing needs and budget.
If you are starting fresh, spend at least half of your marketing budget on digital platforms. Running start-ups should spend 10% of their avenue on digital marketing. However, you can increase the budget as per your business demands and digital marketing needs. All you need to do is keep your sales target and marketing demands in mind.
Digital marketing is essential if you want to grow as a brand. It can boost your sales and earn loyal customers for your business. Another way is to hire a digital company that has expertise in different digital media platforms. So, if you do not know how much you must be spending, contact a digital marketing agency.