Although business owners may not like large marketing budgets, the income they generate can be beneficial. It’s worth noting that digital advertising is currently the fastest growing media market.
There are many different opinions online about how much of your income you should spend on advertising. Some say 6%, some say 15%, and some say 50%. This can make it very confusing to know how much to spend.
We’ll help you plan and pay for your digital marketing projects.
Defining The Budget
When creating a budget, there are a few key points to consider. First, you need to figure out your income. This includes money you make from working, investments, and any other sources. Once you know your income, you can start factoring in your expenses.
This includes things like rent, utilities, food, and transportation. Once you know your income and your expenses, you can start creating a budget that works for you.
- Tools: Tools are the key things that you would require to be able to bring everything else together.
- Creative costs: These are the production costs. Depending on the level of expertise and quality of production that you require will clearly have an impact on the type of budget that you need.
- Media costs: That’s the distribution capability and costs that are required to be able to make sure that your customers or the target audience actually gets access and views your creative that you put out there.
- Human resources: All of this needs a variety of human interactions to be able to bring this together in a robust way.
When budgeting for digital projects, there are a few key areas to consider. This includes the cost of development, hosting, and maintaining your website or digital application. Additionally, you will need to factor in the cost of any tools or software needed to support your project. Finally, don’t forget to account for the cost of any marketing or advertising needed to promote your project online.
- Investment: The level of investment that you have in digital media is critical.
- Mix: You need to determine the mix of digital media.
When creating your budget, be sure to include a breakdown of how much you plan to spend on digital assets, and where those investments will go.
Deciding Factors for Budget Planning
Previous Results
You can track views, clicks, and ROI for digital marketing campaigns.
If you have run similar campaigns before, the good news is that you can use the previous results as a starting point for new campaign planning.
You will either reduce the number of banner ads, or completely rethink the strategy and restart testing with a small budget.
You should always keep in mind that your ROI will be much higher than your media/production budget when calculating it. This is because a lot of time and resources are put into planning, testing, and failing before the final campaign.
Goals and KPIs
Make sure your goals are clear and attainable so you can tell if you met them after the campaign is over.
If you want to measure your success, use key performance indicators (KPIs). Having specific goals, such as increasing awareness among 800,000 people or increasing sales by 30%, is more effective than having general goals.
If you want to be successful, you need to plan your campaigns thoroughly.
Before you start a campaign, you can use tools like Facebook Ad Manager or Google Ads to get full analytics and estimated results.
In order to create your ads, you will need to input your goals into Facebook Ad Manager, Google Keyword Planner, and any other relevant media platforms. These platforms will then provide you with valuable forecasts for data such as cost per click (CPC) and per conversion.
The digital media landscape will change significantly over the next 12 months, but this will give you a great perspective and starting point.
Your Industry
If you own a restaurant, your potential customer base is limited to those who either live in or visit your town. However, your plugin could be used by people from all over the world.
The plugin would require a much bigger budget than a small town restaurant, sometimes 100 times more.
If you want to be successful in marketing for a large company in the automotive industry, you will need to take a different approach than other companies.
You also have a larger audience. The size of the audience is one of the biggest factors in digital marketing. If the business is online, there are more creative freedom and tools available to reach a larger audience.
When you offer online shopping, you have to follow the entire process of conversion, which can be costly due to additional analytical software and manual work. However, the high ROI (return on investment) should make up for these costs.
Target Region and Demographic
The prices of most online advertising platforms, like Google and Facebook, are generated through bidding. This means that your budget depends directly on the number of competitors bidding for the same ad placement, or competitors trying to reach the same demographics.
If you are a photographer in Los Angeles, a printing company that offers custom photo books is likely to be your competitor.
The competition can increase prices by 100%.
Breaking Down the Budget
Strategic
Budgets are created by taking a high-level strategic view and breaking it down into smaller pieces. This is usually done once a year.
Our many organizations have a high-level understanding of the marketing budget for the upcoming year.
Business
The next step is to develop a quarterly planning process that is mostly determined by business needs.
Heads of marketing are trying to determine what they want to spend money on and what type of media resources to use. They are also trying to understand what the big campaigns could be from a quarterly perspective.
Operational
There are operational decisions that are made either monthly or even daily.
Manager will be able to understand how to change their monthly budgets to get the best results for their campaigns.
When thinking about budgeting, you need to consider these three key factors.
Optimizing the Budget
Data and analytics can help optimize the budget.
You can aim to optimize the following:
- Payback: You can determine the overall communication effectiveness or payback, often referred to as ROI. It’s important to understand how the campaign is performing for you. If you set out those key KPIs at the outset of the process, you can then benchmark and measure the overall communication perspective.
- Comparative campaign effects: This is trying to benchmark your campaign versus other ones that have either been done by yourself, or perhaps the results of competitor campaigns or related campaigns. This gives you a sense of benchmarking.
- Efficiency: Optimizing efficiency enables you to determine how best to, or how cost effectively, you can do a certain key activity. This can involve frugal innovation and agile movement, where you aim to do things in short sharp fire way which enables you to gain maximum efficiencies across the marketing campaign.
- Cross-brand effects: How can you optimize the partnership approaches that you may have with different brands and gain synergies from those different brands? Or another you’re thinking about it is leaning on those brands as a way to gain incremental value for your marketing campaign. Being able to partner with different brands are a great way to be able to gain incremental value and use their media space as a means to create greater efficiencies across the entire network.
Inbound Marketing
1. Marketing Strategy
On average, it takes 120 hours, or 3 weeks, to develop a comprehensive digital marketing strategy. The amount of time needed may vary depending on the size and scope of the marketing activities, as well as the author’s level of experience.
At least three times per year, you need to revise and update your plan. Each revision takes approximately 40 hours, or one week.
You will need a total of 240 hours to develop a strategy and make 3 revisions.
A full-time digital marketing specialist will be more expensive than someone who is working part time, but they will be able to do more things such as planning and supervising a team.
2. Website/landing Page Creation
For example, with 10Web you can launch a simple website in an hour all by yourself, with no need to hire developers and UI/UX designers.
If you or your marketing specialist can fit it into your schedule, content creation will be the only extra work required.
If your business needs a website or an app that is custom made for your specific needs, you might need to outsource that work. If such services are too expensive in your region, you may want to consider working with partners overseas.
3. Content Creation
To complete this task within your company, you will need at least one content writer and one graphic designer. A typical content writer in the United States earns approximately $54,000 per year, while a graphic designer earns a similar salary.
Hiring freelancers on websites like UpWork.com is a great way to reduce costs.
We recommend outsourcing for projects that you don’t need regularly. For example, short videos with basic animation can cost about $500 apiece.
4. Social Media Marketing
A social media manager may save you money as they an average of $60.000 in the US.
As long as the social media manager knows the target well and is dedicated to the job, they don’t have to come into the office every day.
The Costs of Tools and Software
1. Tracking and Reporting
The ad prices include detailed analytics.
If you want to track the user journey as a whole, try HubSpot’s professional marketing package.
2. Social Media Management Tools
You need to schedule your posts in advance, sometimes share the same post across different platforms with small changes, keep track of all your activity, and get more detailed data.
If you want to effectively manage your social media presence, you may need to use a tool like Hootsuise or Buffer. The free versions of these tools are usually sufficient unless you need the additional features that come with the paid versions (for example, the ability to add multiple users).
3. Mailing Tools
Companies need to send newsletters, promotions, and updates in a safe manner so that mail systems don’t flag the messages as spam.
The pricing for MailChimp is very flexible. For example, if you have 10,000 subscribers, it will only cost you $75 per month, which comes out to $900 annually.
4. In Case You don’t have a Website
Choose a domain name and content management system. A .com domain should cost about $9 per year. Some content management systems, such as WordPress, are free, while others, such as Wix, start at $5 per month. You’ll also need to choose a hosting service and buy plugins or extensions. Expenses can add up quickly.
Joomla will cost you $1500-7000 every year, depending on your hosting provider, design, maintenance, and some other small expenses.
Outbound Marketing
1. Social Media
For example, if you are a family photographer who works alone and wants to have 500 clients this year, each paying a $200 check.
Instead of spending a lot of money on social ads, you can just spend 5% of your revenue, as many sources suggest.
2. Display Ads
The average price per click on Google is $2.32, whereas most small publications offer price per 1000 impressions, which is much lower. Choose the option that is best for you.
This means that if you have a social media budget of $5000, it will cost you $6000-$8000 to get the same results with banners.
3. Search Ads
If you want to improve your position in search results, the best way to do it is through search engine optimization (SEO). However, SEO can take a while to produce results, so if you need something quicker, search ads may be a better option.
You can improve your ranking on search engines by paying for ads. Google isn’t the only one, Bing sometimes has lower prices for ads due to less competition but gives similar results.
Structure
The thinking behind this is that it needs to be distinct and different from everything else that’s going on. Digital organizations should not be siloed from the rest of the organization.
The text is saying that in the future, content marketing will be a bigger part of marketing and that companies need to change their structure to reflect this.
Digital marketers must be proficient in analytics, customer behavior, and channels in order to be effective. This then feeds into the traditional marketing approaches that are then taken.
From a resource and budgeting perspective, marketing becomes much more involved in an organization than it ever did before.
Social Media Monitoring
You need to think about how to develop your in-house social media monitoring so that a broad spectrum of individuals across the organization have access to it.
You can get regular, quick insights about your customers, which allows you to iterate your approach quickly.
Bear in mind the following when thinking about your in-house social media monitoring approach:
- Gain invaluable feedback: It gives you an invaluable feedback loop to your customers. You can ask specific questions and they give you answers in real-time.
- Establish and refine your tone: You can start to think about your overall communications approach based on pure customer insight.
- Negate harmful social buzz: You can also use it as a way to proactively negate against any other negative social buzz that’s kind of floating around in the ether.
- Monitor competitors: Monitor what’s going on that could harm your brand and then negate against it. You may also want to monitor your competitors, see what they’re saying, what they’re talking about, and then respond to them in a robust way.
- Monitor hashtags: Hashtags are essentially cues with which you can categorize different key things that people are talking about. By monitoring hashtags, you can get key themes of things that people are talking about you.
- Understand location-based social listening: You can gain a robust understanding of when someone is talking about you to and then be able to get into those areas.
- Improve content strategy: By having an in-house approach and listening, you can then gain new ideas about what customers want to hear about and then basically build a robust content strategy on the back of that.
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