It’s likely that more of your marketing budget will be allocated to digital marketing with each passing year, whether you follow current trends or use a custom formula.
The actual amount of your digital marketing budget will vary based on factors such as business type, size, and industry, but you can optimize spending with these tips and techniques.
1. Identify what is included in digital marketing
To optimize your budget, you must know which elements are considered ‘digital marketing’ and which are not. Many companies consider everything online marketing, but not all activities or services fall under that category.
You can focus on the right platforms by deciding what’s included and what’s not. Here are a few activities to consider:
SEO (Search Engine Optimization) - Some senior marketers don’t consider SEO to be a marketing activity, but SEO or organic traffic can drive traffic and generate qualified leads. Check out some useful SEO reporting tools and a free checklist.
Social Media – In the current social media era, many companies are leveraging social media as a significant source of qualified prospects, including Facebook, Instagram, Twitter and LinkedIn.
PPC (Pay-Per-Click advertising) - This form of advertising is often referred to as the gold standard when it comes to online marketing since it only costs when someone clicks on it.
Email Campaigns – Since email marketing is a ‘pull’ rather than ‘push’ strategy, it remains a valuable approach to marketing online.
Display and Video – Today, banner ads are non-intrusive and targeted, and video is the new marketing wave.
Content and Blogs – Creating great content is an essential part of your marketing budget, but people often overlook it.
2. Identify your target audience’s online habits
Understanding where your customers spend time online is the first step to optimizing your budget. You can then direct your resources to the most productive places and maximize the return on your investment. This kind of investigation often surprises marketers, as they may have made assumptions about where their ideal customers are.
If your company uses a lot of its digital marketing budget to leverage LinkedIn, but discovers that most of your customers spend most of their time on Facebook, it’s not an efficient use of your marketing budget.
With analytics (like GA4) and advanced metrics, your marketing team can track where your target audience spends their time, how long they stay, and what causes them to leave. It’s necessary to create a persona of your ideal customer in order to gather this information. Your ideal client or customer should have detailed personas that include age, gender, job title, income, family life, hobbies, and interests.
3. Multi-channel testing
One marketer’s digital marketing strategy may not work for another’s.
By testing across several channels and comparing performance against your key performance indicators (KPIs) early in the budgeting process, your company can identify what’s working and what isn’t. One channel may have a noticeably higher conversion rate than others, or your cost per conversion (CPC) may be quite a bit lower or higher.
You can take advantage of opportunities and avoid areas where you aren’t getting worthwhile results by testing across multiple channels. By focusing on those channels that are providing the highest return on investment (ROI), you can optimize your digital marketing budget.
4. Remarketing across multiple channels
A remarketing campaign can provide a good return for a minimal investment, although it is easy to let slide.
The purpose of remarketing or retargeting is to show ads to users who have visited your site or clicked on one of your ads, but did not convert. As they browse other sites and platforms, your ads will appear since they’ve already shown interest.
Before, remarketing didn’t follow web visitors across channels. With cross-channel remarketing, a user can click on a Google ad (here’s a beginner’s guide) and then see follow-up ads on Twitter or Facebook.
By giving prospects a second and third chance to interact with your brand after their initial contact, you can optimize your budget. As with any PPC ad, you only pay if the ad is clicked.
5. Continually Test and Refine
When it comes to digital marketing, optimization is an ongoing process. After you decide on specific channels to focus your efforts on, it’s important to keep testing because there are so many tools available to test and measure results.
In a campaign, even the smallest changes can produce wildly different results. A simple change in an email sequence or a new subject line could boost an email campaign’s ROI even more, for example.
Don’t be afraid to reallocate funds as needed. Budgeting should have a certain degree of flexibility. As results are often seen immediately, you’ll want to be able to take advantage of opportunities as they arise or cut losses if one strategy isn’t working.
Let’s say your customers are flocking to TikTok to post videos. By engaging them on TikTok, you could open up a new avenue for paid advertising or even content creation.
You need to continuously refine your campaigns across all platforms and test new ideas, strategies, and concepts if you want to get the most out of your digital marketing dollars.
6. Align your sales and marketing efforts
It is essential for your marketing and sales teams to work together to achieve your goals because optimizing your digital results will maximize your budget as well.
It is rare for customers to speak directly with a member of the sales team through online marketing initiatives. The sales team must align with the sales funnel if it includes sales leads. Only by working together can sales and marketing form a cohesive unit and achieve the results you desire.
Conclusion
Optimizing and setting your organization’s digital marketing budget involves many variables, and these variables can change quickly and without warning. You can, however, ensure your budget stretches further by using these strategies and using platforms that deliver results.
If you need more help with your marketing strategy, take advantage of smart marketing tools.
Content marketing is a powerful tool, but it can be difficult to know where and how to start. With so many moving parts, it’s easy to get overwhelmed. But if you approach your content with a comprehensive strategy in mind, the results will speak for themselves—and they may even change how you think about marketing in general!
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