A marketing plan is a detailed roadmap that outlines your marketing strategies, tactics, costs and projected results over a period of time. Your marketing plan and budget keeps your entire team focused on specific goals – it’s a critical resource for your entire company (even more so when you are a start-up with limited resources at your disposal).
One of the biggest nightmare for any digital marketer today is to find out how much budget would be sufficient to allocate towards their digital marketing initiatives.
Though, it is slightly easier for organisations whose DNA is 100% grounded into digital like e-commerce, gaming, music or other content apps etc. But even for them, prioritising their budgets towards various channels is a biggest pain point.
I’ve consulted numerous startups at different stages of their business, and the marketing budget optimisation is one of the biggest grey areas so far.
Here are five strategies that can be implemented instantly to get the most out of marketing budgets.
Focus on what is most important to your business
It is very important to start reading your web analytics report very early on in your business timelines. The site analytics would tell you a lot about your future customer and how you need to reach out. By comparing sources such as paid campaigns, organic traffic and social media channels, you can apply the Pareto Principle, also known as the 80/20 rule.
You are going to find out what sources generate the majority of sales to later tune up your budget allocation. Use the Pareto Principle and identify the top 20 percent of your traffic sources that generate 80 percent of good results. Focus your budget on that.
Pilot Test, Scale up and Repeat
One of the most important thing I’ve learnt in my digital career is to learn the art of creating successful pilot test campaigns. It is vital for your to create certain hypothesis KPIs and key assumptions about your business audience which you would want to test through your pilot campaign.
For instance, if any third-party reports are saying that your target audience is actively engaging through social media and searching less on search engines, you should create a separate social led campaign to test the hypothesis.
Once you have your results, try re-verify them, but this time with slightly higher budget.
Now repeat this to your strategic benefit as it would give you enough confidence as marketer where you can keep on increasing your budgets in social media as a channel and optimise your business returns.
Follow the market, but create your own digital strategy template
While allocating digital marketing budget for your brand or startup, it is critical to follow your industry best practices but at some point you must try to find some key insights about your actual audience.
When you are working in the digital space, you get hit by a lot of data points which transform your thinking about your assumptions. A lot of times, you would realise that the actual buying audience is very different from the target group you are chasing for a long time in your media plans. If you act fast enough, you can optimise the channel budgets in real-time which can boost your overall performance and drive efficiencies.
Digital Marketing budget allocation is an ongoing task
A lot of enterprise companies allocate funds annually for marketing, but digital marketing usually requires more maintenance, with quarterly or monthly allocation adjustments. High volume, automated buying in channels like paid search or paid social should be analysed for performance and landscape fluctuations, with budget allocations being adjusted accordingly.
70:20:10 Rule of Digital Media Planning
Frankly speaking, nobody can actually guesstimate the budget amount, but new predictive modelling technologies have emerged to help CMOs forecast media performance to better allocate budgets.
If you are a nimble startup or a small business, consider the 70/20/10 rule as a good starting point.
- 70% of the budget be allocated to “tried and tested” channels (like Search, Social Media & Email)
- 20% to “safe bets” (newer channels like Mobile Marketing & Native Ads, that seem promising, even if they haven’t proven themselves just yet),
- 10% allocated to “experimental” (cutting edge, unique opportunities like “Big Data” which might provide a big payoff).