Allocating marketing budgets is an eternal struggle for brands and marketing professionals. The number of ways to spend your money are seemingly endless, and the stakes are high. Over-allocate to the wrong channel and you can blow most of your budget on a marketing tactic that doesn’t generate results. Under-fund a high-performing channel and you’ll miss out on valuable leads and opportunities.
So, how can you avoid mistakes in allocation and ensure you make the most out of the marketing budget that’s available to you?
1 – Align spending to goals
Before you can decide where to allocate your marketing budget, you have to know what your goals are. The channels in which you decide to invest your budget should be determined by your business objectives. Certain channels will actively support the achievement of your goals, while others may end up being a waste of valuable marketing spend. Be aware of your goals before you begin so that you can make informed decisions about where to allocate your money.
2 – Analyze past performance
In finance there’s a common disclaimer that “past performance is not indicative of future results”, but in digital marketing there’s a lot to be learned from past campaign performance. Always track the performance of your campaigns to get a clear read on which marketing channels bring you the strongest returns. When allocating future spend you should pull back on underperforming channels, or analyze why those channels have underperformed and find ways to optimize them.
3 – Prioritize channels with proven ROI
If you have to make difficult decisions about which channels to invest in and which to ignore, prioritize those where you’ve already seen proven ROI. It’s okay to allocate some budget toward testing new strategies, but don’t throw substantial budgets at untested methods.
Budgeting is an intensely personal journey for brands. Doing it effectively requires assessing what works for the specific business needs of the individual brand, even it means passing up on trends other companies are jumping on. Even though each brand’s needs are unique, there are a few channels we think are nearly universally worth the investment if your goal is to get the most out of your marketing budget.
Content marketing
When you think of ways to stretch your marketing budget, you might not immediately think of content marketing. It takes a reasonable investment, both of time and money, in order to create valuable content. But even though content creation isn’t cheap, it’s essential to the success of your digital marketing efforts.
Content is the backbone of everything you do. It’s the foundation of effective search engine optimization. It’s the reason people engage with your social channels. It’s what gets people to click on your ads and convert on your site. Without content, your digital marketing efforts don’t have any fuel to run on.
If you’re looking to economize, you can easily find ways to repurpose the content you create to support your efforts on multiple channels. For example, longer form video content created for your website can be clipped and edited for use on social media. The content used in a whitepaper can be repurposed to form the basis of a webinar. Creative ways to repurpose research and content will help stretch your budget further.
Targeted paid search
It’s easy to get started with paid search even on relatively small budgets. You can start small with conservative daily spend limits, and gradually increase budgets as you begin to optimize your campaigns.
Paid search delivers ads to users based on their searches. Those searches indicate an interest, need, or desire for a product or service your brand provides, which means that through paid search you’re attracting users who have self-identified as likely potential customers. It’s a much more targeted and cost-effective strategy than the so-called “spray and pray” channels.
Because paid search starts generating traffic as soon as you enable your campaigns, you’ll be able to achieve results quickly, provided your campaigns are properly set up and managed. Paid search also provides a testing ground where it’s possible to observe and analyze campaign performance very quickly, so you can make your campaigns stronger as you go.
Remarketing
Remarketing — the process of showing targeted display ads to users who have visited your site after they leave and continue browsing elsewhere on the web — is a useful way to recover lost sales. It’s inexpensive to execute, and it helps support other channels at a low cost.
Email marketing
Email marketing is a highly cost effective way to turn leads into sales, and to increase the lifetime value of a customer. Users have opted in to receive emails from you, indicating a level of interest that makes them a valuable audience. What’s more, the costs of running an email marketing campaign are low compared to most other channels. Creative is generally pretty simple, and it’s easy to build templates that can be repurposed across mailings. The cost of distribution is also minimal. These factors combine to make email marketing a pretty safe bet for just about any brand.
Conversion rate optimization
Conversion rate optimization will make the most of the traffic you generate from all your other efforts. Through this process of testing and optimizing the performance of different elements of your site, you can ensure that the work of attracting users isn’t wasted because they encountered a subpar experience once they got to your site. When you focus on the user-experience with your website, you’re far more likely to generate sales and long-term customers, so it’s a worthwhile investment. Allocating a portion of your marketing budget to conversion rate optimization will allow you to continually optimize the performance of your site, ensuring fewer sales are lost.
There’s no single answer for how to allocate your marketing budget. The optimal breakdown will depend primarily on what your brand’s key objectives are and which channels can best contribute to the achievement of those objectives. When determining how best to optimize your spend, focus on the channels that deliver proven ROI, as well as on those that allow you to connect meaningfully with target audiences.
Written by Manish Agarwal, Brand Head at Zee Entertainment Enterprises and a Digital and Social Media Strategist from IIM Calcutta.