A good marketing budget should be able to cover your campaign's expenses from beginning to end. Your end goal isn't just to promote long-term business growth: you also want to get a good ROI. Here's how to set a marketing budget with ROI in mind, plus some essential metrics to track its success.
The Importance of a Marketing Budget
It's nearly impossible to sell your products without a good advertising strategy, especially if you're a small business. With a marketing budget, you'll have all the funds you need to market your business to its full potential. Planning every step of your campaign's expenses also keeps you financially responsible and prevents wasted ad spend.
Ideally, you should have the funds of your budget readily available before you begin your campaign. This way, you won't be tempted to take money away from sales or your personal funds along the line. This mistake can also skew your campaign's ROI and give you an inaccurate idea of its success.
What Does a Marketing Budget Include?
Contrary to what you might think, you don't have to break the bank for a successful campaign. Between websites and social media, digital marketing also has a wide reach. Your budget should include funds to optimize your website with graphic updates, faster response times, and best SEO practices.
Content marketing is also on the rise, so leave some money to invest in blog posts. Companies with blogs get 55% higher traffic than those without. Long-form content keeps customers on your website longer, plus it's an excellent opportunity to showcase the expertise of your company. A post with verifiable statistics and information will increase both brand trust and loyalty among your audience.
Content creation can also include short online video ads that are relatively less expensive to commission. Additionally, allocate some funds toward social media expenses like paid ads and analytics tools. Social media or website pay-per-click ads can be modified to only appear for leads with a considerable interest in your brand.
You can still pursue video marketing if your budget permits. One of the most cost-effective ways to market your brand on the air is through a sponsored lifestyle marketing segment. You can showcase your brand through a demonstration, which is sometimes performed at the studio itself. This saves you the cost of investing in expensive production equipment with your budget.
What Should Your Marketing Budget Be?
There is no one-size-fits-all amount when it comes to a marketing budget. Your budget should be planned around your specific attainable goals, plus the number of platforms your campaign will utilize. Most industry experts agree that 11% of the company-wide budget is a good starting point.
However, your business might need to use more or less depending on its annual revenue. Consider some coaching from a media partner, who can help you allocate your ad spend for the best results.
What Is ROI?
This acronym for return on investment refers to how much money is ultimately earned as a result of your campaign. Determining a good ROI for each business is sometimes difficult because of all the factors involved with individual campaigns. To calculate your ROI, you should divide the total profits earned from your investment by the investment itself. The result is expressed as a ratio or percentage.
Tracking Your ROI
With careful tracking, you should have enough data to determine its ROI by the end of your campaign. One of the best ways to get concrete data is by investing in tools such as Google Analytics. This software shows which platforms have the highest conversion leads, allowing you to allocate more resources to those areas.
For the most accurate measurement, set a time limit for your campaign's ROI. Are you set on procuring a higher monthly sales revenue, or are you more focused on the lifetime customer value? A time limit will also allow you to adjust your strategy quickly if something isn't working.
Improving Your ROI
Flexibility is crucial to every marketing campaign. The world has continued to change rapidly over the past two years, as have your customers' needs. Changing your marketing plan to better suit their objectives shows that you're both a resourceful and empathetic brand. Customers love knowing that their patronage is valued, not just from a monetary perspective.
Set a Marketing Budget with ROI in Mind
Your marketing budget should include enough resources to fund every area of your campaign. To ensure that your campaign is working, you also need to know how to accurately measure your ROI. Don't be afraid to reach out to professionals for help reaching your marketing goals.