Does this sound familiar? “50% of my marketing is working… but I don’t know which 50%”
You may not have said those exact words, but if you’re like most business owners, you have likely grappled with setting and allocating your marketing budget. How much should your total marketing budget be? How should you distribute it across different channels and activities? How will you know when it’s time to increase your marketing spend in certain areas?
You may not have said those exact words, but if you’re like most business owners, you have likely grappled with setting and allocating your marketing budget. How much should your total marketing budget be? How should you distribute it across different channels and activities? How will you know when it’s time to increase your marketing spend in certain areas?
Use this comprehensive marketing spend guide to determine where to focus your budget:
Laying The Foundation
When determining where to focus your marketing budget your strategic planning considerations should include your:
As well as an analysis of:
Prioritizing Marketing Activities
With a foundation in place to use as a lens for evaluating budget allocations, you can give more weight to activities and channels based on either their historical performance or anticipated future performance.
Analyze historical ROI data and compare the results against industry benchmarks. Remember to track attribution across all channels to more accurately determine which touchpoints contribute most heavily to conversions.
Where data is not yet available to reference, run small-scale tests to evaluate new approaches or channels. Where available, you can use predictive tools to gauge possible future performance as well.
And don’t focus solely on hard data! Solicit customer feedback through things like surveys, focus groups, and sales follow-up conversations to get more personal information about what’s working and what isn’t.
Allocating Your Budget
Set clear business goals, including a few primary objectives you want to accomplish as well as reasonable timeframes for meeting them. Focus first on areas with strong ROI. Regularly monitor and adjust your budget as needed based on an analysis of past performance, scaling up where it makes sense to do so.
Give the most budget to proven channels and approaches and allocate some budget to testing new ones. Conduct small scale experiments and look for lessons to be learned from them whether the results are positive are negative.
Never put all your eggs in one basket. Marketing tactics can change quickly and channel popularity ebbs and flows, so it doesn’t make sense to go all in on just one thing. Instead, diversify your budget to avoid overconcentration in one area.
Measuring Success
Before allocating budget to any marketing activities understand what you want to measure – brand awareness, lead generation, conversions, digital engagement, retention, loyalty, or something else entirely.
Then, be sure that you’re tracking the right metrics for your specific business goals. Determine which metrics will signal success and set clear benchmarks to help gauge progress toward business goals. Your KPIs may include:
Finally, test and optimize to make progress in key areas, investing more budget as you see improvement.
Avoiding Pitfalls
Don’t fall for the same marketing strategy traps your colleagues and competitors have (or will)! The most common pitfalls are:
If you need help with digital marketing planning and budgeting, reach out to us! We can help develop a strategic marketing plan to guide your efforts. Our team has extensive experience creating content marketing strategies that drive results!
Laying The Foundation
When determining where to focus your marketing budget your strategic planning considerations should include your:
- Business Goals
- Target Audience’s Demographics, Preferences, and Behaviors
- Sales Funnel Stages/Customer Journey
As well as an analysis of:
- Historical and Ongoing Performance
- Industry/Market Trends
- Budget Constraints
- Channel Effectiveness
Prioritizing Marketing Activities
With a foundation in place to use as a lens for evaluating budget allocations, you can give more weight to activities and channels based on either their historical performance or anticipated future performance.
Analyze historical ROI data and compare the results against industry benchmarks. Remember to track attribution across all channels to more accurately determine which touchpoints contribute most heavily to conversions.
Where data is not yet available to reference, run small-scale tests to evaluate new approaches or channels. Where available, you can use predictive tools to gauge possible future performance as well.
And don’t focus solely on hard data! Solicit customer feedback through things like surveys, focus groups, and sales follow-up conversations to get more personal information about what’s working and what isn’t.
Allocating Your Budget
Set clear business goals, including a few primary objectives you want to accomplish as well as reasonable timeframes for meeting them. Focus first on areas with strong ROI. Regularly monitor and adjust your budget as needed based on an analysis of past performance, scaling up where it makes sense to do so.
Give the most budget to proven channels and approaches and allocate some budget to testing new ones. Conduct small scale experiments and look for lessons to be learned from them whether the results are positive are negative.
Never put all your eggs in one basket. Marketing tactics can change quickly and channel popularity ebbs and flows, so it doesn’t make sense to go all in on just one thing. Instead, diversify your budget to avoid overconcentration in one area.
Measuring Success
Before allocating budget to any marketing activities understand what you want to measure – brand awareness, lead generation, conversions, digital engagement, retention, loyalty, or something else entirely.
Then, be sure that you’re tracking the right metrics for your specific business goals. Determine which metrics will signal success and set clear benchmarks to help gauge progress toward business goals. Your KPIs may include:
- Website Traffic
- Leads
- Cost Per Lead
- Revenue
- ROAS (return on ad spend)
- Conversion Rate
- Bounce Rate
- CTR
- Churn Rate
- CLV (customer lifetime value)
Finally, test and optimize to make progress in key areas, investing more budget as you see improvement.
Avoiding Pitfalls
Don’t fall for the same marketing strategy traps your colleagues and competitors have (or will)! The most common pitfalls are:
- Moving Too Fast – Chasing trends and getting distracted by shiny cool new things is a great way to blow your marketing budget. Don’t simply copy your competitors without knowing what you hope to get out of it.
- Moving Too Slow – if moving too fast is dangerous, moving too slowly can be just as deleterious. Don’t ignore newly emerging platforms just because you don’t have all the details yet. If a new channel is gaining steam, look into it and consider running a small-scale test to determine its viability. Don’t get stuck with all your eggs in one marketing basket because you’re afraid to try something new!
- Taking a “Set it and Forget it” Approach – Don’t stay still! Always be looking for ways to optimize your existing efforts. Failing to optimize may allow your success to dwindle as your competitors continue to adapt and evolve.
- Neglecting Retention – Pursuing new leads is important, but you still need to prioritize customer retention. Remember, keeping your existing customers is typically far more profitable than finding new ones!
- Forgetting to Segment your Audience – One size does not fit all! Break out your audience into distinct segments to find ways to address their unique pain points and help them achieve their specific goals. Don’t be afraid to go after a small audience. The more niche, the better when it comes to audience segmentation.
- Using the Wrong Attribution Model – Using a single or last-touch attribution model instead of a multi-touch attribution model can skew performance data, causing you to misallocate your budget. Where feasible, track all touchpoints throughout the buying process to better understand the customer journey and weight your budget appropriately.
- Misalignment – Taking a siloed approach with your marketing can result in unsuccessful myopic marketing activities. Instead of focusing on a single business goal or prioritizing one team’s objectives, involve a broad set of stakeholders to ensure activities align with overall business goals. Once your marketing activities are well aligned, integrate them across all channels to better move customers through the sales funnel.
- Cutting Your Budget – The right strategy across the right channels can’t succeed without high-quality content and you’re not going to get that asking an unpaid intern to write all your content or using whatever ChatGPT spits out. Invest money in areas where you can get the kind of high-quality output that drives results!
If you need help with digital marketing planning and budgeting, reach out to us! We can help develop a strategic marketing plan to guide your efforts. Our team has extensive experience creating content marketing strategies that drive results!
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