You need to plan and estimate your digital marketing budget for 2022 to hit a home run. Knowing how to allocate a budget for digital marketing can help you control your finances effectively and understand where you need to invest more and where to cut down costs. But before that, let’s understand the basic concepts of digital marketing budget.
What Is a Digital Marketing Budget?
A digital marketing budget is the amount of money set aside by a company for costs associated with promoting its products or services. Digital marketing budgets are normally created quarterly or annually.
Compared to an advertising budget, a marketing budget is more comprehensive as it covers all aspects of marketing, not simply ad campaigns.
Setting up a marketing budget plan with an internet marketing budget template can help you control your digital spending.
What Is a Digital Advertising Budget?
A digital advertising budget specifies the proposed advertising costs, informing the organization’s management about the anticipated costs of implementing the advertising strategy. A digital advertising budget is part of a marketing budget and a business’ overall sales.
When you create a digital advertising budget, ensure that it aligns with your marketing and promotional goals. And as it’s a part of the marketing budget, it’s essential to have a digital ad budget plan to control spending, avoid overspending, and track advertising expenses for better ad campaign management. Thus, through an internet marketing budget plan you can get the most out of your digital marketing strategies, providing a better return on investment.
Why You Need a Marketing Budget Plan
Without any marketing budget plan and annual marketing budget template, it would be difficult to determine the time and place to spend your digital marketing budget. The absence of the budget plan can frequently lead to excessive digital spending without having desired outcomes.
Thus, you can have more effective digital spending on various channels and implement inexpensive digital marketing through a plan and internet marketing budget template.
Digi-Tip: With a digital marketing budget, your team will better coordinate the project goals with the allotted budget, determining what goals are more realistic to achieve with the set amount.
A business without a properly organized digital marketing budget and strategy will not have optimized spending habits and that will result in allocating too much in places where it is perhaps not needed and vice versa.
How To Allocate a Budget For Digital Marketing
Your budget should include all of the costs associated with promoting your product or service, including SEO, email marketing, PPC services, media and sponsorship fees, SMM services, etc. If you are wondering how to allocate a budget for digital marketing, check these tips to get the most out of your internet marketing budget.
Think of Your Business Goals
Define your marketing goals one more time and the ways you are going to achieve them. Prioritize your SMART goals (specific, measurable, achievable, relevant, timely) over the rest as these are going to provide your business success. With that in mind, plan your product launches, review your digital marketing spending of the last year and your digital ad budget. Focus on strategies that were successful and remove those that didn’t have a positive outcome.
When setting a digital marketing budget, consider long-term goals (boosting sales and brand awareness) and short-term targets (boosting conversion rates, improving website traffic, etc.) that will help to achieve those primary goals.
Use 70:20:10 Rule in Marketing
If you are a startup owner, you may wonder how much money a startup should spend on marketing? As a good rule of thumb, businesses, in general, spend 7-10% of their income on marketing and about half or more of this needs to go to digital marketing. However, as digital marketing has become more essential over time because of Internet popularity, you need to put more money into digital marketing efforts. With that in mind, you should use the 70:20:10 rule in marketing for allocating funds efficiently.
What is the 70:20:10 rule of money? A 70:20:10 principle of budgeting is about dividing your digital marketing budget into three parts.
Let’s dive into each part of the 70:20:10 rule in marketing:
- Spend 70% of your budget on current effective strategies — According to the 70:20:10 budget rule, you should spend 70% of your digital marketing budget on the “now” in 2022. This means that you should focus on the strategies that are working well for your business. Consider the strategies, products, or services that boost your business revenue and spend money on those areas to get even better results. In this way, you’ll have peace of mind that you allocate your budget on aspects that have already worked well before. You can use the money toward improving your performance and achieving valuable outcomes.
- Save 20% for upcoming things — You should save 20% for marketing methods or products that are on their way. For example, to increase your market share, you may launch and sell a new product line or service. In this way, you can make your business grow by investing in upcoming products and marketing strategies to reach new prospects and boost conversion rates.
- Spend 10% on emerging methods — Keep 10% of your budget for emerging technologies and strategies. You must allocate some of your budget to new ideas so that your company stays ahead of the competition. This could be anything from cutting-edge technology to experimenting with new ideas. You need to invest money in those ideas to determine if they will be profitable for your company.
- Have an annual marketing budget template to have a year-ahead view and control your future expenses, monitoring your business performance.
Digi-Tip: The 70:20:10 ratio of budgeting is a good place to start your marketing budget, however, it doesn’t mean that you have to stick to it in all ways possible. For instance, if you are a company with a larger budget, you may find it too much to spend 10% of it on emerging methods.
Choose The Right Marketing Channels
Begin by examining your requirements and determining which promotional channels would provide the best return on investment while running your digital marketing strategy. This will be very useful in deciding how to spend your digital marketing budget to make sure you’re getting the most bang for your buck.
Keep in mind that you need to allocate funds in channels that work best for your brand. Thus, see which platform is successful and invest there. For 2022, you can think of investing in PPC advertising, eCommerce solutions, SEO, email marketing, etc. You still need to break down realistic estimates of how much you want to allocate for each of these to meet your set goals.
Have an Internet Marketing Budget Template
Understanding your budget’s share is critical for determining where your money is going and which channels are delivering the best outcomes. Having an internet marketing budget template will help you adjust the budget to maximize spending and ROI.
Through a digital marketing campaign budget template compare the budget costs of each channel and make adjustments as needed if you want to change priorities during the campaign. Track monthly spending to determine trends and seasonal peaks. For instance, if you are an eCommerce business, it’s a good idea to put a larger percentage of your budget into a month like December.
2022 is on its way — have an annual marketing budget plan to track your income, expenses, and savings. Opt for professional, efficient, and cost-effective digital marketing services from Digilite’s marketers to increase your revenue and boost conversion rates.