Digital marketing offers a wide scope of growth opportunities for businesses and consumer brands. Especially in 2021, a far greater number of companies are switching towards digital marketing methods in order to scale their businesses and increase their revenues. However, the greatest challenge that companies and brands around the world face is to manage the costs involved in digital marketing.
Budgeting is very important for a business. The costs for promoting your brand across multiple platforms and social media sites and generating successful leads through various methods can skyrocket easily, and thus, require strategic budget planning. An effective digital marketing budget can generate better leads and increase ROI, which is why the most successful marketers allocate 40% of their total marketing budget on content and digital marketing with an average of around 26%.
Here are a few digital marketing budgeting tips that can help your newly established startup or small scale business to grow exponentially in little time.
1: Recognize your business goals
Before deciding how much money to spend upon different digital marketing methods, it is important to identify your business goals and the milestones that you want to achieve for the upcoming year. Your expenses must align with your goals for the year. This way, you will spend on the resources that will help your company grow. For example, if your goal is to generate more leads by increasing the traffic on your sites, it is better to spend more on content creation, SEO optimization and tactics that boost your targeted traffic.
2: Evaluate different options
Digital marketing is an extensive field with a plethora of options and methodologies that help you promote your brand across multiple platforms. Each one of the methods is important and can help you generate better leads and impressive revenues if used correctly. Create a budget with specific percentiles dedicated to each method that can help you achieve your marketing goals and scale your business.
For example, most marketers allocate 8.9% of their budgets to digital display ads and 5.3% to paid search advertising.
3: Allocate your budget
The marketing leaders around the world recommend that businesses should dedicate 7% to 15% of their total business revenue to their digital marketing budget. Once you know the exact costs that you can spend on your digital marketing campaigns, it is time to start allocating your budget to different methods through strategic planning.
It is best to dedicate a larger portion of your budget to the methods that have worked for your business in the past and are in line with your marketing goals in the future.
According to statistics, digital marketing can improve ROI by up to 300% and generate as much as 2.8 times better revenue growth. This is why experts believe that digital marketing will increase from 44% of marketing budgets to 54% by 2024. Around 95% of organizations have increased their digital marketing budget in recent years and almost 9 out of 10 marketers expect their budgets to grow in 2021 as well. The key is to effectively use this budget to scale your business through digital marketing, especially when you are a running a small scale business.