You have a chunk of money dedicated to marketing. But do you know exactly how you’re going to spend it? A surprising number of businesses don’t have a defined marketing budget breakdown to use as a starting point. This also means there aren’t any specific goals or metrics they’re chasing either.
The best marketing efforts are born from a clear strategy. This kind of a defined roadmap is the fuel to drive your campaigns. Don’t just dip into the marketing budget as you go. Spend the extra time to set out your plan in defined terms.
Top 6 Channels For Your Marketing Budget Breakdown:
1) Content Marketing
Content marketing promotes your brand through blogs, video, and other online materials. The primary goal is for people to read your post or watch your video. But the secondary goal is to generate content that makes your readers comment and share the material online.
You’ve heard the term “organic marketing” – this is where content marketing fits in. Viewers find your business through searches, blogs, and social media. They’re led to your content naturally by way of their online customer journey.
The overall purpose of content marketing is getting your brand in front of as many people as possible with engaging content. You then drive those viewers to a landing page and nurture them for a conversion.
What should you consider when budgeting for content marketing?
There are a lot of options to choose from, such as:
- Hiring one or more writers to create high-quality content for your blog or other publications
- Commissioning a graphic designer to create images or infographics to pair with your content
- Working with a videographer to produce professional instructional or informational videos or vlogs
- Fees associated with posting your articles on highly-viewed websites
When allocating budget to your content marketing, think about the type of content you want to produce. Also factor in the number of content pieces and how frequently you prefer to release fresh material.
2) Paid Marketing
Paid marketing works in stark contrast to organic marketing. With organic marketing, your brand releases content in the hopes it’s viewed and shared by people. Conversely, paid marketing targets specific audiences and pushes ads and content to that audience.
This type of marketing is more upfront in its sales focus. Paid ads typically encourage the audience to “click,” whether it’s on a purchase button, a webinar link, or a white-paper download. The goal is to get the viewer from the ad to the landing page as quickly as possible.
Difference between organic and paid marketing
While organic and paid marketing each have their pros and cons, there’s one significant difference between the two: Speed.
Organic marketing moves at a much slower pace. You have little control over how many views or shares your content may get. Traffic may draw out over weeks, months, and even years.
Paid marketing moves a lot faster, even though paid ad campaigns are usually much shorter in duration.
Because paid marketing focuses on a specific, targeted audience and you push the content to the viewer, there’s a higher likelihood of a quick response.
Potential expenses in paid marketing
When it comes to your marketing budget breakdown for paid marketing, think about these potential expenses.
- PPC (pay-per-click)
- Banner ads
- Social media ads (including Facebook, Instagram, Pinterest, and others)
As with any marketing campaign, it’s key to measure the impact and your return on investment. There are several ways to arrive at these results, some more complicated than others.
Calculating your paid marketing ROI
Here’s a simple equation to help you determine if your campaign is achieving an acceptable ROI.
(Sales Growth – Marketing Cost) / Marketing Cost = ROI
Here’s an example:
- Marketing campaign cost: $1,000
- Sales growth: $10,000
- 10,000 – 1,000 = 9,000
- 9,000 ÷ 1,000 = 9 = 900% ROI
3) PR – Off-page SEO, Influencer Marketing
PR = Public Relations. The concept has existed in business since the beginning of buying and selling. But in the digital world, a lot has changed. Things move fast – really fast. It’s more important than ever for brands to build a trusted image.
It’s no longer just about disaster recovery. PR is all about instilling a feeling of confidence and credibility. In some cases, it’s also a reflection of your customer service.
There are a few ways you can use PR in your marketing efforts.
Optimizing your website for search, adding great content, and building high-quality landing pages are all examples of on-site SEO. But to create a trusted brand, it’s important to branch out from your website onto other sites.
When other websites link to your content or website, that’s when off-site SEO comes into play. Ideally, you want top quality, high-traffic sites to include your link. For example, Forbes.com publishes an article with a link to Acme Financial Planning. That link is off-page SEO for Acme Financial Planning. It gives them credibility because the link is published on a trusted site.
But that’s not the only benefit. When other authoritative websites link back to your content, that adds to your ranking too. That’s where SEO comes in.
Influencer marketing targets your audience differently. It helps build your brand through people who are considered influential. Your influencer might be a celebrity, a sports figure, or just a trusted voice in your field. Influencers have a large social media following or a high number of blog readers, but this isn’t always the case.
This sort of marketing works not because the person is famous (although that usually helps.) It works because the person has a certain amount of impact on the consumer.
Here’s an example: Lagavulin Whisky, a relatively unknown brand to the casual weekend drinker, teamed up with actor Nick Offerman. While successful, Nick isn’t considered a Hollywood A-lister. He’s known for his “manly-man” characters and is often stern and authoritative (in a funny way.) This was the image Lagavulin was looking to portray.
Nick’s campaign for Lagavulin Whisky completely transformed their sales and took their brand to the next level.
When considering the PR part of your marketing budget breakdown, think not only about recovering from brand hiccups, but also these potential costs:
- Time and effort invested in off-site SEO
- Fees to pay one or more influencers
4) Customer Advocacy and Referral Programs
Customer advocacy and referral programs are the best of both worlds. You’re working to keep your current customers while simultaneously working to get new customers. All this by way of your existing customers!
Don’t let your customer referrals slow down: The Truth About Why You’re Not Getting Customer Referrals
Customer advocacy programs can be as simple as spreading a new hashtag that your customers start using. Now their following sees your brand and your hashtag, so you have exposure to a whole new audience.
Referral programs, on the other hand, offer rewards to your current customers for sending new customers your way. These rewards are often in the form of monetary discounts on future purchases. It can also be free services or upgrades, or even early access to new products.
The logic here is pretty simple. Reward your customers for spreading the word about your brand by making them feel part of an elite group who receives rewards.
Budget to get your referral program off the ground:
- If you don’t have one already in place, the cost of building a referral program
- The cost of maintaining your current program
- Expenses associated with program rewards
5) Marketing Tech Stack
A marketing tech stack is, you guessed it, a bunch of tools used for marketing. Here are some standard tools you’ll find in a marketing tech stack:
- Customer relationship management system
- Email management system
- Social media management applications
- Content management system
- Analytics tools
Each application in your tech stack serves a specific function to further your marketing plan. Some are used more than others depending on what a company’s particular needs are. In an ideal setup, your tools will work integrate and work together.
Why an integrated marketing tech stack matters
Marketing tech stacks are essential for lots of reasons, like efficiency and reliability. But the most critical part is data. Bottom line, no question about it. You must have data to track your marketing efforts and plan your future strategy accurately.
Many companies forget about event marketing when they’re planning their budgets. In some cases, events are considered a cost of doing business rather than a marketing cost. Events fit better in a marketing strategy, but its metrics ought to be revenue-focused.
Events, like trade shows, conventions, conferences, are not merely staged advertisements.
They shouldn’t be treated as advertisements at all. Events give you the opportunity to engage with your customer genuinely. You’re putting a real face on your brand, which is an opportunity you don’t get often.
Conferences like NextCon are a great example, where industry leaders come together to share best practices. Consider this an investment in your marketing efforts. Not to mention, trade shows and similar events are a great way to get a peek in on your competitors.
How to Allocate Funds with this Marketing Budget Breakdown
By now you have the first draft of your marketing plan in place. And you’ve kept the budget in mind as you’ve moved through the process. Now it’s time to allocate real figures to those plans.
- Focus initially on branding. Branding tends to be the most crucial piece of your plan and something we’ve mentioned several times already. Your brand must be recognizable, and you need a trustworthy name before any of the other pieces fall into place.
- Next, focus on traffic. Consider the costs associated with organic traffic as well as paid traffic. Great branding won’t matter if you don’t have paths for your customers to reach you.
- Finally, focus on conversion rate optimization (CRO.) In other words, turning visitors into buyers. Your brand is in place; you’ve got traffic flowing, now it’s time to convert all that traffic into paying customers.
Now let’s look at some numbers. Specifically, your company’s age and revenue. Of course, each company is unique, with different strategies and goals, but here’s the general rule for marketing spending.
- New companies: 12% – 20% of gross revenue
- Established companies: 6% – 12% of gross revenue
Matching Your Marketing Plan and Your Budget
With your branding-traffic-CRO plan in place and a budget figure in mind, your next step is meshing the two. Apply the available funds to the different aspects of your marketing plan to get the ultimate ROI you’ve calculated!
Republished by permission. Original here.