How to allocate your digital marketing budget

One of the hardest decisions you have to make as a small business is where to allocate your digital marketing budget. There are so many forms of marketing and you need to focus on just one. Every dollar should count for something.

If you’re struggling to make that work, this guide will show you how you should allocate your digital marketing budget.

A continuous process

First, you need to get yourself in the right mindset when it comes to your budget. Understand that this is an ongoing process. Chances are you review your budget at least once a month. The digital marketing arena is changing so quickly, you have to.

Who is your target audience?

It is well known that different demographics react to different types of advertising. If you are targeting young people, investing in contextual ads on various websites is not a good decision because your target audience will largely use ad blockers.

Likewise, investing a lot of money in Facebook ads if you’re selling products aimed at seniors isn’t a good idea because they’re the smallest demographic of people on social media. There are better options.

You need to know who your target audience is. Gather a picture of your ideal client. You need to know their interests and behaviors, as well as personal information such as demographics and gender.

Advertising by e-mail

The vast majority of people use email marketing. It is a medium that is far from dead. According to Forbes73% of marketers said email marketing was a core strategy, and 59% said that in the past year they plan to increase their email marketing budgets.

This is a fundamental type of marketing that you should never ignore. Email marketing is relevant to all audiences in all industries. Figure out what your regular expenses will be by looking at the maintenance costs of your messaging platform. Since email marketing is so affordable, it will still only be a tiny fraction of your overall digital marketing budget.

Content marketing

Content marketing is a marketing tactic that will take up the majority of your digital marketing budget. It’s also the hardest to allocate because it entirely depends on the approach you take. You can divide your content marketing budget into some of the following areas:

• Content creators (written content, images and videos).

• Social media experts.

• Data experts.

• Tools to facilitate content marketing.

And that’s not counting the time that your employees will have to devote to managing your various content marketing campaigns.

What about your overall marketing budget?

You need to remember that your digital marketing budget is set in the context of your overall digital marketing budget. Digital marketing budgets are also increasing. According to research by Wealth LookoutThe share of digital marketing in overall marketing budgets is expected to increase from 18.9% in 2012 to nearly 27% in 2017.

The needs of your general marketing activities and your digital marketing budget should always be considered.

The rule to follow

There are no hard and fast rules for cooking up a digital marketing budget. Over time, you’ll find out what works and what doesn’t for your business. Predictive modeling technologies have emerged to allow business leaders to better determine how much to allocate to their budgets.

The 70/20/10 rule is a great starting point for those who are not yet sure of their needs.

1. 70% of your budget is allocated to the parts of your marketing campaign that you already know are effective.

2. 20% of your budget is used for experimental purposes. The 20% will generally be used to experiment with topics that you would classify as “safe bets”. You’re not sure they’ll be successful, but chances are.

3. 10% of your budget is used to go wild. This is where you go to try those crazy ideas you’re not sure about.

You don’t have to religiously stick to these numbers. Feel free to play around with these numbers as much as you like depending on what works for you.

Conclusion

Allocating a digital marketing budget is a continuous process. There is a lot of trial and error involved in this process. Over time, you’ll find out what works for you and what doesn’t. You can even decide to change your allocations based on how your business is performing at that time.

How will you allocate your digital marketing budget?