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How To: Allocate Budget for a Digital Marketing Strategy in 5 Steps

how-to-allocate-your-budget-for-digital-marketing

There are numerous digital marketing techniques spanning just as many platforms -- email, social media, blogging, website optimization, video, and so on. And when you’re thinking about marketing for your business, it can be tempting to want to include as many of those techniques as possible.

While “be everywhere” may seem like an effective marketing motto, it doesn’t answer the question of how to allocate your budget for a digital marketing strategy for maximum ROI

Without a well-planned marketing budget in place, your efforts are bound to fall short. And if your funding runs short during the middle of a campaign, you’ve essentially thrown all the money you’ve spent on it so far directly into the trash.

This primer will teach you how to allocate your budget when creating a digital marketing strategy.

5 Steps: How to Allocate Budget for Digital Marketing Strategy

Even if you’re working with an external B2B digital marketing agency, it may seem overwhelming trying to figure out how to allocate budget for a digital marketing strategy. Luckily, we have some experience with that. Here are our top tips for maximizing your investment in a digital marketing strategy:

  1. Set SMART goals
  2. Research, research, research
  3. Look over your shoulder at past campaigns
  4. Evaluate your budget
  5. Allocate your budget

Read through these tips and try to apply them to your specific business needs. After all, marketing for a medical device is different than how to market for a manufacturing company.

1. Set SMART Goals

Your overall goals for a digital marketing strategy are going to directly affect your budgeting decisions. If you don’t have a clear vision of what you want your website and your sales numbers to look like one year from now, your marketing team can’t craft a strategy with impactful marketing activities to meet those specific goals.

The best way to achieve this is to set some marketing goals. More specifically, setting SMART goals, which are:

  • Specific
  • Measurable
  • Achievable
  • Realistic
  • Timely

SMART goals will serve as your company’s GPS on your way to your marketing destination. They should represent your company’s priorities while tackling any pain points your customers may have.

Both the marketing and sales teams should work together to create SMART goals, as their alignment is crucial to moving prospects easily down the sales funnel.

2. Research, Research, Research

Once you define your goals, conduct thorough research on the digital marketing world within the industry you operate in. This is your chance to figure out what types of marketing techniques will resonate best with your buyer persona, along with what types of your marketing your competitors are trying. Perhaps your ideal customer loves video content. Or maybe they’re partial a higher level of engagement, and marketing automation mechanisms could come in handy.  

This step may take the longest because there’s so much you can learn from asking:

  • What social media platforms does our target audience use?
  • How do we do content marketing on a budget?
  • What keywords or phrases is our audience searching on Google?
  • What marketing techniques are most effective in our industry?

Leave no stone unturned when it comes to your marketing research. If you don’t know how and where to begin your research, consider seeking the advice of an agency who offers digital marketing services. 

3. Look Over Your Shoulder at Past Campaigns

If you have experience creating a successful digital marketing campaign for your products and services, then you should be using prior campaigns to inform how to allocate your budget for your next digital marketing strategy. Consider it a marketing budget template of sorts. 

Look back at past campaigns and compare the amount of money spent on them and what the outcomes were. Did they generate a basket full of leads, or did they fall short? Did you generate more sales, or did the campaigns have no effect? And what was the quality of leads – did you get a lot of tire kickers or did the prospects become satisfied customers? 

Use this information to better support your future marketing campaigns, and to help yourself avoid repeating past mistakes.

4. Evaluate Your Budget

You’ve set your goals, done your research, and reviewed past marketing campaigns. Now that you know which direction you want to head, it’s time to get realistic about how much you can spend.

These numbers don’t need to be exact yet -- just so long as you have a good understanding of how much you can spend on different aspects of your digital marketing budget, including any paid search engine marketing or social media advertising. The total cost of your marketing campaign will depend on several factors, such as:

  • Business goals
  • Current expenses
  • The amount of competition you have
  • How fast your company grows

Always leave a little wiggle room in the budget. It’s impossible to account for all the “what-if’s” of marketing, and the last thing you want is to find yourself short on budget in the middle of a campaign. Having a budget reserve is best practice and saves you from headaches later on.

5. Allocate Your Budget

You now have all the information you need to allocate your budget for your digital marketing strategy. Think about your different marketing channels, and figure out which are the most important and prioritize your spending plan. 

There are several potential channels of a digital marketing B2B strategy to consider, and how you prioritize them depends on your campaign goals. Some of the most popular channels include:

Every company has different goals and a different audience, so it’s not always beneficial to allocate a little bit of budget to each channel. Depending on your objectives, it may be best to narrow down your options to a few channels and provide each with a bigger spend. 

Create an Inbound Marketing Budget

One of the best feelings in marketing is watching your campaign turn you a profit. And digital marketing embodies the old saying: “You’ve got to spend money to make money.”

Inbound marketing is an extremely effective business methodology that allows you to attract new customers through content creation and personalized experiences. Because the results compound over time, it’s a great way to get the most out of your budget.

Want to learn more about creating an inbound marketing campaign? Take a closer look at our free guide, which provides you with a checklist of things you’ll need:

Download Your Inbound Marketing Campaign Checklist

This article was originally published in March 2021 and was recently updated to reflect current industry trends.