Marketing has been around since the time of "ye old candle maker" signs, yet with changing times come changing tactics and emerging strategies.
What worked back then - hanging a sign - may still drive customers today, but unless you're the only candle maker in town, you're losing business.
We get it. Money for marketing expenses is limited, and you want to direct your marketing dollars towards what works best.
For some, it may be one marketing tactic, such as social media, which they focus all of their efforts. However, it's smart for business owners to spread their marketing dollars around to get the most bang for their buck.
In a world where nearly everyone is online, most businesses allocate a significant portion of their marketing budget towards online marketing. However, how much is enough? How much is too much?
Here, let's take a look at how businesses can determine what percentage of their annual marketing expenses to drop into online advertising.
Let's face it; we have all had some success and failures when it comes to our past marketing efforts. If you are still in business, you hopefully have had more success than sob stories.
However, what may have worked before, and worked well, may now not be providing the returns you want to see.
So, look at your online marketing funnels and explore the results you achieved with each effort.
Whether it's leads captured, Facebook engagement, or email responses to direct mail campaigns, there is statistical data that provides a good insight of how your past efforts translated into real revenue.
Perhaps no marketing channel presents as much new and emerging technology as online.
As new online marketing tactics and technologies appear, it is crucial to research how these trends can help you achieve your specific marketing goals.
When building an online channel, there's a lot to consider. What works best? Which outlet gives me the best bang for your buck?
Several online marketing channels to consider:
Moreover, there are more outlets opening up every month. Allocating across all channels could be daunting, so consider which works best for your industry, and spend generously on those with which you have already seen success.
Typically, businesses set aside about 20% of their marketing budgets for new campaigns.
This allocation does not have to be entirely spent on online marketing, but you should determine how best to spread this money across all channels - online and offline.
A Forrester Research and eMarketer report showed that businesses were expected to spend on average 41% of their marketing expenses on online strategies.
This amount is expected to increase over the next three years to almost 50% of all marketing expenses to be spent on online campaigns.
Research has shown that the number of U.S. Consumers spending time on their digital devices is higher than ever before.
This growth has opened up more opportunity to reach a greater number of people online in the coming year.
Setting aside a portion of your online budget for new campaigns will allow you to take advantage of marketing to new technologies as they emerge throughout the year.
When deciding how much of your marketing expenses to spend on online campaigns, you need first to establish goals.
Ask yourself the following questions:
The answers to these questions will provide some of the information you need to set realistic goals.
Every company is unique in the milestones they wish to reach. Goals are only beneficial if you can accurately track whether or not you are getting there (or at least close).
Some may want more return customers, where others are happy getting better brand recognition from their marketing efforts.
Whatever your goals, write them down and periodically measure the return on investment (ROI) against those set goals.
Also, remember, it's okay to reevaluate and change your plan as needed to achieve better results that can get you closer to the finish line.
The amount you decide to spend on online marketing is dependent on several factors. Your revenue, profit margin, and free cash all play key roles in establishing your marketing budget.
Typically, companies invest about 6% to 15% of their annual revenue into marketing campaigns.
First, find out what's working and how much you spent on that strategy last year. Spend generously on these techniques, since they are driving core business.
Second, evaluate your research on new online strategies and reserve a percentage towards these channels. You don't have to allocate it all up front. Set aside a portion to spend later in the marketing year.
Lastly, determine how much of your cash flow you can direct towards marketing each month without negatively impacting company operations.
It is important to remember to track your marketing expenses; you first need to set a budget and stick to it, providing a baseline for the measurement of your successes.
The success of your past efforts should provide a measuring stick for what gives you the best results for your marketing dollars.
However, if you need data, do some research into what is working for other companies in your sector. Keep in mind that specific online strategies work better on service-based businesses than they do for product sellers.
See what is working well for other brands, set a goal to get the best ROI for your marketing expenses.
Every brand is unique, and building a recognizable online presence takes time.
Following the steps outlined above will offer some structure for your online advertising plan and help you get the most from your marketing expenses.
As with any marketing strategy, you will need to plan your online goals, create a realistic budget, and then track and measure the results throughout the year.
With so many online channels available to build your marketing strategy around, it is important you stick with what works and discard that which isn't showing you the results you expect.
If you would like to know more about how to make the most of your online marketing, let us know. No matter what your business goals are, we can help you reach or surpass those goals.
For a free consultation - go ahead and reach out to us. We're ready to help!