You have now decided what your overall marketing budget is for the upcoming period. But where should you invest these dollars? It can be difficult to decide what to allocate for tools, technology, analysis and the media spend itself including agency fees. First, we’ll discuss current trends in marketing budget allocation and then we’ll give you some tips on how to divvy up the money you have at your disposal.
According to Forrester Research, 38% of B2B marketers (in all industries) are expecting to increase their digital marketing budgets between 1-9%. 27% expect to increase it between 10-19% and roughly 16% are increasing more than 20% in the coming year. The numbers for B2C marketers are similar with the majority planning to increase SEO and paid search efforts.
This positive trend is encouraging for digital marketers, as it appears that marketers are benefiting from new attribution tools as they are made available. For instance, 80% of B2C marketers report having generated sales from social channels, while 90% of B2B marketers attribute leads or sales to social. ROI and digital attribution is becoming more of a deciding factor to allocating budgets to the digital marketing arena; this is something we’ve been emphasizing forever. Good digital marketing pays for itself (and then some). Now that you know what other marketers and companies are doing, let’s talk strategy:
Involve Other Departments
Marketing budgets can be tight, so it’s important to try and marry your initiatives. Some examples: utilizing budgets allocated to R&D is prudent for something like social research, the act of listening to unsolicited consumer conversation in order to gain insights about your business. HR hiring initiatives can be put into place via social or paid media and additional funds can be allotted from that department as well. Thinking about various “marketing” initiatives as a holistic approach to improving your company can open up the doors to combine forces with other departments.
Allocate by Media Spend
1. By media type
Begin by assessing the different types of digital media you are running. How did your social, search or display efforts pay off in the last year? Where did you see growth potential and where do you think your budget can be slightly more restricted? If your KPIs (key performance indicators) are being properly measured in each of these media types, it should be simple to assess what is working and what needs to be manipulated.
2. By publisher/platform
Now you can go even more granular. Assess your performance by platform and publisher in the digital sphere. Notice the trends in your digital media initiatives. Did you see an increase in audience engagement for display ads on specific publishers? In respect to social, maybe you’ve discovered that your audience is more active on LinkedIn than Twitter. Study up to see if the trends you are finding are similar across the board in your industry. If it seems to be consistent, shifting your budget to reflect these findings may be the best way to utilize your funds.
Allocate Budget for Technology
1. Analytics tools
What good is all this data if you can’t analyze it, find trends and enact operational change? That question was rhetorical, by the way; we all know that data by itself is not helpful. You need to have the tools to track and measure successful campaigns. Analytics solutions, like Google Analytics for instance, can be free. But you need to assess how much data you’re generating and how you’re going to aggregate and decipher it all. If it’s going to require a customized solution, there needs to be budget allocated to this.
2. Agency tools
Some agencies can offer technology solutions in order to help with the analysis part of the data. Customized databases are just one instance of solutions that can be tailored to your business. In order to maximize this budget allocation, an agency must base every decision around the business’s specific goals. If lead attribution is paramount, but there are several sources of disjointed data, it may be necessary to build a solution that will aggregate this data and match it to various digital initiatives, thereby rendering a specific ROI number.
The good news is that digital marketing initiatives are just that–digital. This means they can be altered at any time. Many of these digital campaigns can be adjusted daily in order to maximize your budget. The most important factor is tracking performance in order to make the best decisions about where to go next. Budget allocation is great for planning the coming months – and remember that you are not completely locked in like with traditional media. Take advantage of the opportunity that digital affords to shift funds between initiatives in order to better reach your targeted audience and improve bottom line conversions.