Marketing budgets are usually tight. To maximize profitability, every dollar must be allocated effectively. Here are few strategies that can be implemented instantly to get the most out of marketing budgets.
Focus on what is most important to your business
It is very important to start reading your web analytics report very early on in your business timelines. The site analytics would tell you a lot about your future customer and how you need to reach out. By comparing sources such as paid campaigns, organic traffic and social media channels, you can apply the Pareto Principle, also known as the 80/20 rule.
You are going to find out what sources generate the majority of sales to later tune up your budget allocation. Use the Pareto Principle and identify the top 20 percent of your traffic sources that generate 80 percent of good results. Focus your budget on that.
Don’t scale until it’s profitable.
Any marketing campaign, online or offline, should be started on a small scale with narrow targeting. Once it is profitable, the campaign can be scaled. Scaling can mean experimenting with different campaign types on the same platform as well as adding other platforms.
The reasoning behind starting small and waiting for the ROI to come in is two-fold: First of all, the profit from the initial campaign creates a buffer for potentially unprofitable additional campaigns or platforms. Secondly, business owners know now exactly what works well. They can base other marketing efforts on that, or simply put more budget into the initial campaign, without significantly increasing the risk of missing out on a return.
You should also consider the importance of having a statistical relevance in results before deciding on whether to scale up your investment or not. Always support your decision with enough data insights.
Follow the market, but create your own strategy template
While allocating digital marketing budget for your brand or startup, it is critical to follow your industry best practices but at some point you must try to find some key insights about your actual audience.
When you are working in the digital space, you get hit by a lot of data points which transform your thinking about your assumptions. A lot of times, you would realise that the actual buying audience is very different from the target group you are chasing for a long time in your media plans. If you act fast enough, you can optimise the channel budgets in real-time which can boost your overall performance and drive efficiencies.
Pilot Test, Scale up and Repeat
One of the most important thing I’ve learnt in my digital career is to learn the art of creating successful pilot test campaigns. It is vital for your to create certain hypothesis KPIs and key assumptions about your business audience which you would want to test through your pilot campaign.
For instance, if any third-party reports are saying that your target audience is actively engaging through social media and searching less on search engines, you should create a separate social led campaign to test the hypothesis.
Once you have your results, try re-verify them, but this time with slightly higher budget.
Now repeat this to your strategic benefit as it would give you enough confidence as marketer where you can keep on increasing your budgets in social media as a channel and optimise your business returns.
Stay in control of budget and targeting.
Not all marketing solutions allow for full control of how much is spent and who is targeted. Instead of spreading your budget thin on a large variety of platforms, focus on the ones where you are in full control of both targeting and cost. Examples are the online advertising giants, Google, Bing and Facebook.
The more control you have on what you can spend your budget on, the more you will be able to get rid of what does not work and focus your limited resources on.
Rule of Digital Budget Planning
Frankly speaking, nobody can actually guesstimate the budget amount,
If you are a nimble start-up or a small business, consider the 70/20/10 rule as a good starting point.
70% of the budget be allocated to “tried and tested” channels (like Search, Social Media & Email)
20% of “safe bets” (newer channels like Mobile Marketing & Native Ads, that seem promising, even if they haven’t proven themselves just yet),
10% allocated to “experimental”
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So, what steps have you taken to ensure your digital marketing plan ready? We’d love your valuable insights, so share them with us via the comment box below!