Successful digital marketing isn’t a game of chance. Proactive planning can make an outsized difference in your results, and a key piece of this planning process involves establishing an effective digital marketing budget.
With a thoughtful budget, you can gain more control over your marketing spending, target key aspects of your operations that need further investments, and, ultimately, drive your online business towards scaling up.
What is a Digital Marketing Budget?
A digital marketing budget is a financial plan outlining the costs of all digital marketing efforts, such as social media advertising, content marketing, Search Engine Optimization (SEO), pay-per-click (PPC) advertising, and email marketing.
A budget is like a compass directing the ship of your digital marketing efforts. It keeps your expenditure on course and helps you evaluate the effectiveness of your efforts. According to a report by Gartner, companies typically spend about 11.2% of their revenue on marketing. Of that budget, approximately 45% is directed toward digital marketing efforts.
Why You Need To Create A Marketing Budget
If you’re a business owner, you know the importance of a marketing budget plan. A marketing budget helps you determine where your money is going, what kind of return on investment (ROI) you can expect from each initiative, and how much time and effort each project will require. With this information, you can make better decisions about where to allocate your resources and whether or not a particular marketing initiative makes sense for your business.
Your marketing plan should include strategies that are flexible enough to change as needed while providing guidance for future projects. If one thing isn’t working out as expected, you can easily adjust the numbers in your plan to reflect reality instead of just wishful thinking.
Why You Need An Annual Marketing Budget Template
Marketing budget templates are a great way to ensure you spend your marketing budget wisely. If you’ve ever had to come up with a marketing budget, you know that it can be difficult to estimate how much money you’ll need in advance.
You might know how much money you want to spend, but you don’t know how much of that will go toward advertising or if it will be enough for all the other things you want to do with your marketing plan.
A template can help you figure out what percentage of your budget should go toward what activities so that everything is accounted for. It’s also helpful because it helps track what has been spent and what still needs to be spent throughout the year.
Know What You Spend As A Business
The first step to developing your digital marketing budget plan is understanding what you have to spend. You need to know the following:
- Understand how much money you have for marketing and ensure it’s enough for the campaigns you want to run.
- What you’re spending now: Look at your recent expenditures on paid ads, social media posts, and other digital advertising/marketing forms. This can help give context for where exactly you should set aside funds in the future (and will also help if there’s an emergency).
Decide Where To Spend
Now that you know how much to spend, it’s time to decide where you will spend it. You have a lot of options when it comes to marketing channels, but not all are created equal. You need to understand your audience and their needs before deciding what platforms will work best for them—and for you.
Your goals should also guide your decision-making process. If your budget is limited and/or if ROI is important, then you’ll want to prioritize digital marketing channels such as search engine optimization (SEO) and social media advertising over more expensive options like influencer marketing campaigns or native advertising.
If the goal of digital marketing is simply awareness and lead generation, then pay-per-click (PPC) ads might be a good option for reaching those goals at lower costs than other channels; however, if engagement or conversion rates are important as well, then social media is probably going to be better suited since people often feel more comfortable interacting with brands there versus through PPC ads.
Manage And Save Your Marketing Funds For The Future
Next, you must set aside money to test new ideas and adjust your strategy as needed. This is where the rubber meets the road for digital marketing; if you don’t test out what works and what doesn’t, how will you know how much budget to set aside?
There are many ways to track your marketing KPIs (key performance indicators). I personally use Google Analytics and Salesforce data together because they complement each other well. Each has its strengths: Google Analytics provides more raw data, while Salesforce provides better insight into my sales pipeline. In addition, both tools offer dashboards that allow me to quickly see my website’s metrics at a glance without having to dig through pages of reports.
Track Your Marketing Budget
You should be tracking your marketing budget. You need a plan for using that money and what results you expect.
Here are some tools that can help:
- Google Analytics: This is a free tool provided by Google that allows you to track how many people visit your website, where they came from, and how long they stayed on the site (among other metrics). It also tracks conversion rates, which tells you what percentage of visitors completed tasks like filling out an online form or buying something from your store.
- HubSpot CRM: This is another free tool provided by Hubspot, but this one allows you to keep track of leads in one central location—so if someone fills out a form on the company’s website or downloads its guidebook (which is commonly used as lead magnets), their information will be stored here so you can follow up with them later if needed.
Digital marketing budget planning can be easier with simple tools and knowing where to start. Once you know the basics, it’s time to start with a digital marketing budget plan. You may need a marketing team to help understand your marketing spend limit. Regularly performing market research is also helpful in social media marketing budget proposals.
If you need any further assistance with creating an effective budget plan or just want more information about how to get started with online advertising, reach out to us!
