Create a Digital Marketing Budget
Digital marketing is becoming an increasingly critical part of running a successful business venture with each passing year. But just how much should you set aside for digital marketing? What kind of strategies should you put in place, and how much should you invest in each? Here we’ll go over some tried and tested methods for developing a solid digital marketing budget.
Setting Your Overall Budget
Overall, the average company spends around 10% of its revenue on marketing, and the SBA recommends spending about 7-8%. Of course, some companies allocate more or less than these figures on their digital marketing budget. However, it’s a good idea to consider these benchmarks when setting your overall marketing budget.
Many experts agree that around half of this budget should go towards marketing online. That may seem like a lot, but with the ever-expanding popularity of the internet, it’s crucial that you don’t let potential leads go to waste.
Stats and studies show that traditional marketing strategies are falling behind their digital counterparts. Furthermore, innovations in the technology sector mean that digital marketing budgets are only to get bigger over time, and with good reason, so don’t fall behind.
The 70-20-10 Rule
Once you’ve set your overall digital marketing budget, the question is how to allocate these funds effectively? Here, the 70-20-10 rule can act as a point of guidance.
So what is the 70-20-10 rule, and why is it helpful? Let’s take a look.
The rule breaks down your output and investment into three areas.
The first area, where you’ll want to be allocating around 70% of your digital marketing budget, concerns steady, safe, and reliable content. In other words, business as usual. Strategies here include promoting popular products and marketing on platforms where you already have a record of success, such as email. After all, you don’t want to fix what isn’t broken, nor do you want to pull the rug from underneath your previous business strategy.
20% of your budget goes into investing in your business’s future by developing new strategies. For instance, you might market a new product line or invest in a new platform that has recently gone mainstream. Of course, there is risk involved here, but it’s also essential for your company to expand and innovate.
The final 10% of your digital marketing budget should go towards new, responsive, and more experimental strategies. For example, this could mean investing in emerging technologies or media platforms or reacting to recent events or changes in the digital landscape. Investing here keeps your company’s marketing agile and adaptable enough to deal with any unexpected changes.
The 70-20-10 rule isn’t set in stone, and you’ll want to alter it according to the needs of your business. However, it can be a great point of reference. By budgeting this way, you should avoid letting your marketing get stale while also avoiding putting too much of your budget into risky ventures.
Some Final Considerations
When setting a digital marketing budget, you’ll want to keep your business’s overall targets and goals in mind. There’s little point in advancing your marketing into areas that won’t help the company achieve its goals. You’ll also want to constantly analyze and audit your strategy to keep an eye on what is and isn’t working.