How to Realistically Use Your Digital Marketing BudgetWhether it’s your first time jumping into digital marketing or you’re taking another crack at it now that you’re more prepared, there’s still a lot to be considered to ensure your initiatives are successful. Strategizing what channels and tactics to execute isn’t as easy as simply picking what’s most appropriate for your audience. It’s great to know what the “all in” approach should be, but figuring out the “realistic” approach really comes down to what your budget is.

Having said that, this doesn’t mean digital marketing won’t work for you. This article will run through how to ease into spending and expand your digital marketing footprint as you find success along the way. Thus protecting your budget, achieving results, and growing at a responsible pace.

Factor 1: What is your primary business challenge?

If you are considering adding digital marketing to your business growth plan, then there must be a reason or likely many reasons for pulling the trigger. It’s natural to fall back on wanting to achieve everything at once as fast as possible, but there’s a risk when diving head first into this. If the initial executions don’t perform, it’s much harder to pivot and course correct.

To avoid overcommitting budget, time, and effort into your digital marketing initiative, consider which one need is your priority:

Your business is still unknown.

If your business is fairly new to the market, you will find that nobody is seeking you out. This means that you have little to no online following on social media, low website traffic, and the majority of your business to date has been through word of mouth. You will find you’re continually relying on that word of mouth and in-person networking to find customers.

Your business is hard to find online.

If your business has been established for a few years and you’ve built a stable customer base through word of mouth and networking, but your growth is stagnant, this may be due to prospects not knowing where to find you. Your website may not rank well in search and your social profile posts are not reaching wide enough audiences leading to missed opportunities for those that may recognize you online in search or social media if you had a strong presence.

Your website doesn’t generate leads or sales.

For some, there may be a healthy amount of brand recognition and/or website traffic, but the website doesn’t seem to convert a strong enough percentage of visitors into contact leads or on-site sales. This may mean that value-based messaging, proof cases, or proficiencies are not being demonstrated clearly enough to motivate a visitor to convert into a customer.

It’s important to realistically identify which challenge is the priority to overcome for you when the age of your business, market visibility, and sales successes are considered. For example, there is potential for you to identify that visibility is a majority priority, but there is a risk that if nobody recognizes your company, you may still miss the mark on a healthy click through rate (CTR).

Factor 2: What is your primary digital marketing goal?

Identifying your primary digital marketing goal is likely going to be very closely matched with your primary need, although this may not always be the case. It’s still worthwhile to run through this thought process as well to compare against your primary need and see how they align.

Become a recognizable brand that prospects seek out.

If you’re new in the market, then it’s unlikely that your prospects will find you by name or during their research process online. By increasing your visibility online through search engines and social media networks and utilizing organic tactics you can increase the possibility of your prospects finding you. Ideally, after building name recognition and trust in the market, your company name would be remembered and searched online specifically to find you. This increases your opportunity to generate future sales through highly qualified traffic growth on your website and social media profiles.

Find new customers and generate leads/sales.

The easiest and most obvious goal is generating leads and sales from new customers. This can also be the most expensive approach to doing so, but can be the fastest way to achieve a result as well. Depending on the competitive density of your market, you may find that organic visibility is hard to come by if you are newer on the scene. This is a scenario where paying to be in front of your audience can expedite the process of being found and immediately generate qualified traffic to your website to convert into leads/sales.

Engage existing customers to earn repeat business.

For some businesses, the greatest opportunity still lies within their own existing customer base. This is especially true for industries such as home services and supply manufacturers where repeat customers are the springboard for overall company growth. Digital communication tactics through content on your website, email, and social media keep your services or products top-of-mind by providing valuable insights and stories relevant to your customers. These customers are the warmest future leads you have for your selling cycles and should be considered as a growth opportunity.
Be realistic with prioritizing your digital marketing goals. Perhaps more importantly, stay true to the goal you set as the priority. If your business lacks market visibility and that is achieved, you have set the foundation for future sales growth whether it is happening at the moment or not.

Factor 3: General rules for strategizing the use of a digital marketing budget.

Once you have a clear understanding of your primary business challenge and goal, look to see if they align. If brand recognition and visibility are your challenge and goal, then strategize which channels can succeed for both. If brand recognition and sales are your two priorities you may have a conflict compared to budget in which you have to decide which is more important.

Here’s a few things to consider when moving forward:

Don’t spend money you don’t have.

Here, I’ll say it. Digital marketing is not a magic silver bullet. Like anything else in life, it’s advisable to spend within your means. Hence the prioritization of your needs and goals. As a newer business or a business diving into digital marketing for the first time, you should look to spend 5-10% of your annual profit. Profit is revenue you have on hand that deserves reinvestment into your growth. If you budget on top line revenue, you run the risk of gambling on your future, which puts an unfair amount of pressure and anxiety on your decisions and results associated with your digital marketing initiatives.

Measure success against your #1 goal only.

This is an important “stay focused” point. If your priority is exposure and visibility, then you are judging the success of your efforts on organic rankings, impressions, and traffic. If the expectations shift to leads and sales mid-campaign, you end up measuring the wrong result for the initial prioritized goal. This goes back to being realistic with where you are and what you need for your business. Your view of how successful digital marketing can be for your business is tied to only measuring against the prioritized goal. Anything else is apples to oranges.

Budget for an initial 3-6 month runway.

Digital marketing takes time to spin up. Organic search rankings, online advertising bid learning, content generation each take time to develop, execute, and see movement towards your prioritized goal. Ideally a 12-month budget should be decided upon as part of your overall business plan, but in an isolated case, making sure that there is a 3-6 month runway will provide just enough time to prove the strategies at play are working. In the event that they are successful, more runway is created and tactics may even be expanded. In the event that they are struggling, this provides enough time to pivot and adjust.

Factor 4: Who will be managing the digital marketing campaigns?

In most circumstances, a business will not be able to jump into having an agency, freelancer, or hired employee manage all forms of digital marketing. There will be a balance of which channels are active, what tactics are being executed, and who is in charge of managing each. This is another factor that impacts the usage of your budget.

DIY Self Management

A lot of money can be saved by managing your own digital marketing initiatives. If you have a limited (or no) budget, start here. This is typically easier when organic tactics such as content marketing or social media are in play. Organic tactics have little risk since they require no financial backing, only time invested in content generation. If you do look to venture into paid channels such as SEM and social ads, consider researching on the platform you are attempting to use before taking your first stab at it.

Collaborative Management

Taking a collaborative approach can be another cost saving method and potentially a benefit to your initiatives. Professional help costs money, so spend it where you need it most. This need likely falls within the paid advertising and technical tactics of your plan. Namely, SEO, SEM, Social Advertising, analytics and reporting. You may find you are able to handle the complimentary organic tactics yourself until you have more funding to offload those as well.

Vendor Management

This is the most costly approach, but a fairly hands-off one. Leave it to the experts who will suggest which tactics and channels work best for you, some or all and then execute on your behalf and report back with detailed analytics.

Set an honest budget range and strategize to that.

Simply put, don’t overextend yourself. If you have a budget, let your prospective vendor know what you have to work with. Remember to use your profit margin as a starting point, understand your cash on hand to put towards the work, and what your main priority is you are willing to put funding towards.

An open checkbook (or worse an open credit card) can get you a lot of services, but consider focusing on getting smaller prioritized wins first and then adding to your digital marketing initiatives and budget as you gain traction. Limit your risk and maximize your results in each phase along the way.