How to Plan a Digital Marketing Budget
It’s true that businesses need a digital marketing budget. You can’t actually come up with an effective digital marketing strategy unless you already have a budget, otherwise, you won’t know how to spend these funds. Your business needs a digital marketing strategy. Common reasons include increased revenue, increased reach and awareness, or keeping up with your competition.
Once you have determined these reasons, focus on how much revenue/reach/awareness each one will bring and how much money will be needed to accomplish these goals. Yet, it is the budget that makes this all possible. Here is how to determine your budget:
Determine Your Digital Marketing Goals
Before developing your marketing budget, it is essential to determine your organization’s business goals. Usually, your digital marketing goals are related to your overall business goals. For instance, if your organization wants to generate revenue, its marketing goals should reflect this objective. On the other hand, if your organization’s goal is to direct consumers to its website to build brand awareness, then its marketing goals must reflect this objective.
It is an essential step in the process because once you know what you want your specific goal(s) are, you can establish a digital marketing strategy accordingly. It will ultimately give you an idea of how much money is needed to accomplish these goals and how much revenue they must generate.
Value of Each Digital Marketing Strategy
Once you know what you want your digital marketing strategy to accomplish and why you need it, it’s time to put a dollar value on this objective. This value is calculated based on your assumptions earlier in the process. For example, if it was determined that your specific goal(s) were to generate $100,000 in revenue and needed a digital marketing strategy to accomplish this objective. If you decide that a total of $10,000 for each system will achieve this goal, then $10,000/year is a reasonable estimate for the value of each strategy.
Revenue Each Digital Marketing Strategy Will Generate
After determining how much money is needed, it’s time to estimate the revenue you will receive from each digital marketing strategy. The calculation of this value is based upon assumptions you made earlier in the process and how much money has been allocated for each plan. For example, if your goal is to generate $100,000 in revenue and you have given $10,000 for each strategy (strategy one will cost $60,000), then the estimated payment of system one would be $40,000.
Calculate the Total Cost of the Strategy
To determine the total cost of the strategy, add all costs with their associated amounts. For example, if your objective is to generate $100,000 in revenue and you have given $10,000 for each strategy (strategies one and two will cost $60,000 each), then the total cost would be $160,000.
Businesses that understand how to plan a digital marketing budget are better equipped to accomplish their organization’s goals. Planning a digital marketing budget is straightforward if the proper steps are followed. It starts with identifying your specific organization’s goal(s) and ends with determining how much money is needed to accomplish these goals.
The most important thing is that you have your digital marketing strategy identified and why your organization needs this strategy. After you have completed these steps, you are ready to begin planning your digital marketing budget.
Categorized in: Digital Marketing
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