How to Allocate Your Budget for Digital Marketing

If you know something is working, whether it’s a product that’s flying off the shelves or a new employee who’s overdelivering, then you’ll do what you can to ensure its continued success. The same principle applies to your budget for digital marketing: you should do what you can to support the strategies that are working. But how do you know which of your marketing efforts are delivering the best value? Here are some tips on how to allocate your budget for digital marketing.

ClickGiant is a leading digital marketing agency serving clients nationwide. Get in touch today to learn more about how we can help you grow your site’s traffic and conversions.

Decide on Your Goals

You might already know what numbers you’re trying to achieve in terms of sales, but that’s not enough information to help you set your marketing goals.

With the help of your team, determine what’s most important for the success of your business. Is it increasing brand awareness? Is it cross-selling more products once a customer is on your site? Is it getting customers who abandoned their carts to come back?

Ask these questions and develop your answers as a team. Once you’ve clearly defined your goals, you can develop and implement the most effective marketing strategies.

Evaluate Past Data

If you’ve been in business for a while, it’s likely that you’ve already developed and implemented some digital marketing strategies. Before you decide where to spend this year’s budget, take the time to analyze what worked in the past and what didn’t.

For example, you may have spent a good chunk of your budget on Facebook ads last year, but in retrospect, it’s clear that the majority of your customers came from Google Ads or organic search traffic. In this example, since you’re not appealing to as many people on Facebook, it may be best to allocate part of that budget to Google Ads or organic content production instead.

However, you might not have this data. If your business is new, then try to discover what you can about your competitors’ past marketing decisions and their results. You can also make decisions based on your results on a month-by-month basis when you’re first starting. It’s always important to try, test, then adjust to get the best results!

Make a Plan

To develop the most effective plan, take into account both your new goals and your past results—then do your research. Find out where your target customers are spending their time (i.e., which websites and apps), and strategize how to most effectively capture their attention on those sites.

For example, if you need to increase brand awareness, find out where your target demographic is spending their time online. For a demographic that spends a lot of time on Instagram (let’s say Millennial women), decide how much of your marketing efforts should go towards sponsored posts on the app.

Set Your Budget

Now you know what your goals are and where it will be most effective for you to market. But how much should you spend? Generally, it’s recommended that your marketing budget be 9-10% of your overall revenue. Let’s break down some key channels:

Content Creation (Copy, Graphic Design, Video)

Some of your budget will need to be spent on content creation. If you employ an in-house marketing team, then you already know how much of your budget this is.  If you don’t, or if your team is small and needs help, then you have two main options for support: either hiring a creative agency or working with freelancers. The best option will depend on your company’s specific needs. Quality content is essential to the success of your organic and paid campaigns—do don’t skimp!

Social Media Marketing

If your target customers are on social media—and many of them likely are—you need to allocate part of your budget to sponsored ads on their favorite apps. Whether that’s Facebook, Instagram, TikTok, Reddit, or another site, you need to find out where your target market is and spend part of your budget on sponsored ads on that network.

How much money you allocate for sponsored ads will depend on your goals and what’s proven to be effective. However, social media marketing isn’t all sponsored ads. You should also be posting organically on your own social media pages.

One other social media marketing option to consider is influencer marketing. Research whether your target market responds to influencer marketing before deciding to invest in any partnerships.

Email Marketing

Email marketing is a fantastic way to stay in contact and remain top-of-mind with your existing and prospective customers. Taking the time to grow your subscriber list and craft compelling emails can pay off, as long as your customers are opening them. Make sure you don’t send too many emails, which can be a major turn-off.

Paid Search

You can pay Google to advertise your business in search results. Costs can vary depending on your industry/niche. The good news, however, is that PPC allows you to only pay for the ad if someone clicks on it, not just for the impression. While it’s generally a good idea to invest in paid search for keywords that are highly relevant to your business, make sure you know just how much you’ll be spending (and how much of your total marketing budget it will eat up) before you commit. Check out more about Google’s new search ads 360.

Track Your Results

Your decisions are only as solid as the data they’re based on. Collect data on the results of your marketing strategies. Track whether your paid social media ads are bringing in more customers or if your Google remarketing efforts are sending customers back to your site. It’s essential that you track the results of your marketing spending so that you’ll know which directions to go—and which paths to avoid—in the future.

This is likely the single most important part of learning how to allocate your budget for digital marketing. The more data you track, the more information you have at your disposal to make smart strategic decisions for the future of your marketing efforts.

ClickGiant is a leading digital marketing agency serving clients nationwide. Get in touch today to learn more about how we can help you grow your site’s traffic and conversions.