Having a well-planned marketing budget is an integral part of any small business venture. Digital marketing is a wide field with a lot of opportunities for creative customer engagement. However, the vast nature of online and digital marketing means it can be easy to get lost and overspend on campaigns that don’t end up returning profits. Use these tips to help you determine how much your business should be spending on digital marketing and how to allocate your budget effectively.
Determine Your Format
Digital marketing can take many forms, such as email newsletters, video placements, and social media pages and campaigns. According to a 2016 study, social media was the most widely-used digital marketing platform for Canadian business owners, with up to 83% of businesses utilizing some type of social media marketing. Social media is an accessible form of digital marketing because it’s usually low-cost or free. While you may be able to set up a business page for free on Twitter or Facebook, ensuring that your marketing materials reach your audience will often cost extra. Websites like Facebook charge a premium for displaying posts by business pages to a higher percentage of followers. Social media is a highly visual medium. Restaurants, online clothing shops, and independent creative professionals who can engage audiences on social media with daily image posts might benefit from paying for added reach. Businesses that deal with finance and services might not see as much return on their investment. Strategic placement and timing of digital advertisements can also be important. Say you run a bed and breakfast. Your advertising budget might vary by quarter because you do the majority of your business in the summer. You might want to double the number of digital ads you run in the spring when potential customers are planning their summer vacations. Targeted advertising like email newsletters and text campaigns are a great way to increase engagement with an existing consumer base. The emails and texts themselves cost next to nothing, but you should budget for the cost of hiring someone to generate campaign materials and communicate with customers.
Recalculate Your Budget
A 2017 survey indicates that the average Canadian small business has a marketing budget of just over $30,000 annually. With about half of Canadian entrepreneurs currently spending some of their budget on online and digital marketing materials, it’s wise for any new business to at least try digital marketing. Even if your marketing budget is smaller, you can still launch an effective campaign on social media websites like Instagram and Twitter. Even budgeting just a few hundred dollars for such campaigns during your first quarter can give you a good indication of whether it will be worth your while to increase your digital marketing budget. One of the biggest factors in determining whether online clicks will turn into profits is the state of your company website. If you plan on creating a digital marketing campaign, a functional company website is a must. If you’re a product seller, you want to make it as easy as possible for customers to buy the products they saw in your digital marketing. If it’s as easy as clicking through to an intuitive e-commerce site, you’re going to see increased sales from impulse buyers. If, however, a customer clicks through and finds a confusing, outdated, and uninformative website, they’re going to click away and forget all about your product. Make room in your budget for the cost of an attractive website design, and don’t be afraid to hire a professional to do it for you. Digital marketing can be a lot more cost- effective than traditional methods like print advertisements, billboards, and TV commercials. By putting some effort into devising the most efficient digital marketing campaign and budgeting for website fees and online experts, you can ensure you get a high return on investment.