It is pie season. Although, is it ever not pie season? Thinking about pie gets me all warm and fuzzy inside and makes me somehow smell the pumpkin coming out of the oven. The hardest decision, when it comes to pie, isn’t what kind to eat (okay, that is kind of difficult, but they are all delicious), it’s what size of a piece you should take. The same is true with your marketing budget. You know you want and need one, but how you slice it up is the hard part. How much of your marketing budget should be used for digital marketing?
One of the most crucial beginning steps in figuring out a marketing budget is solidifying your business’s clear, concrete goal or goals. When you start planning your marketing budget you need to have a solid strategy with a well-defined plan and need to know what message you want to send and where your ideal audience is. What interest them? Are you more likely to grab their attention with a billboard on the side of the road, in a newspaper, while they are watching TV, or on the Internet?
With over 4.54 billion people active on the Internet, marketers turn to digital marketing channels to help them reach more leads. With digital marketing, there’s more advertising space and more opportunities to market to your ideal audience than most traditional forms for marketing. Digital marketing allows very targeted and specific messaging that can vary based on demographics, time of day, etc. Digital marketing allows small businesses to compete with larger businesses successfully.
Regardless of how big you decide to make the digital marketing slice, it is clear that in this day and age, your marketing budget and plan needs to include digital marketing. If you haven’t used digital marketing in the past, the time is now. Likely, you are already on the digital marketing train, but are you investing enough of your budget to that form of advertising? When it comes to digital marketing you should gauge what has worked and what has not in the past for your business. You should also evaluate your competitors. Where are they marketing and what does or does not appear to be working for them?
If you’ve already had some experience with digital marketing, then look closely at what your results have given you. Where have you experienced success and why? Which efforts did not work for you? Do you know why they didn’t work for you, especially if these were techniques that did work for other businesses? Knowing what worked and what didn’t, and, most importantly, why there was success or failure, are vital pieces of the digital marketing puzzle that you’ll need if you want to move forward with your next effort (Digital Marketing Institute).
A major factor that should help you decide how much of your marketing pie to invest in digital marketing, is your website’s conversion rate. Step one of digital marketing is having a website that will convert the leads that you drive to it. Is your website producing the results that you would expect? If not, your first slice of pie should be used for updating your website. If people go to your website and don’t become customers, there is no sense in you spending your budget to get them there. The number one goal of marketing is to gain new business (or it should be), and if that is not happening because people are leaving your website, your pie may be overcooked and wasted.
When planning your marketing budget, you should consider that digital marketing is one of the least expensive and agile forms of advertising. Unlike traditional forms of marketing, if a search ad or banner ad is not performing well, they can be updated, usually instantly. You likely can not have a billboard on the side of the road updated in real-time, and if you somehow have the power to do so, it will cost you.
Your marketing budget should strongly take into consideration, how much it cost you to acquire a customer. Answering this simple question will provide high-level guidance on whether advertising will be an expensive or relatively cheap proposition. It can also give you an idea of how many customers you can expect based on what you’re spending.
As previously mentioned, gaining a new customer through digital marketing is typically much cheaper than other forms of advertising, so it is important to know the cost per customer as you plan your marketing budget. When considering the cost of acquiring a new customer via digital marketing, you should review your average cost per click. A low CPC of a few dollars on very targeted keywords means you can get more out of a small budget. However, a high CPC of $10-plus is an indication that you’re going to need to spend more to acquire a new customer (Forbes).
As with the wide variety of pies, marketing and digital marketing comes in many forms. We could spend all day telling you how to plan your marketing budget, or you could contact us for a free consultation and we can help you make your crucial decision.
At Water Bear Marketing our waterbears love pie just as much as the next person, so we would love to help you determine how to slice your marketing pie… It also helps that we are digital marketing experts and want to see you and your business succeed.