We’re in the age where marketing is recognized as the foundation for business growth. Therefore, marketers have to devote time to determining exactly how each marketing dollar will be spent so they can optimize the ROI.
However, this can be hard if you’re just launching new campaigns for the first time and don’t have valuable historical data to rely on, especially if you’re venturing into a new channel. The way forward starts with outlining a detailed budget based on what you know about your company and your overarching goals. From the insights you gain from each investment, you can then adjust your understanding of your budget based on individual ROI metrics from campaigns. You might use a variety of metrics to determine your ROI (e.g. first-touch, last-touch, or multi touch attribution), but whichever you choose, seeing that end result can inform your budget decisions so you can allocate budget to the most effective channels.
Before you have valuable, historical metrics to inform your campaign optimization and budget allocation, here’s a sample marketing budget breakdown that you can use as a guide:
Campaign Planning and Content Creation: 40-50%
To understand what returns you should be seeing on your marketing investments, you need to start with focused campaigns based on your goals. Ideally, your goals should map to each stage of the customer lifecycle. For instance, if your broad goal is awareness or branding, you might want to invest in a campaign that differentiates your brand from your competitors and offers value to your prospects so they come to associate your brand with value. If your goal is more focused on customer retention and growth, then your campaigns should be focused on how to keep your customers happy and make them more successful with complementary products or services.
Whatever your campaign objectives are, it’s likely that content will serve as the meat of them. Yet according to Content Marketing Institute, only 32% of B2B marketers have a documented content strategy, even though 88% are using content as a part of their core marketing mix. Digital content such as blog, social media posts, videos, ebooks, infographics, and the like all play a role in evolving a brand story that solidifies your standing in the market and makes your prospects want to interact with your company, the first step in the customer journey toward converting them into satisfied customers. In addition to creating a scalable content creation process, you may need to seek out the services of vendors or consultants to help you refine your plans. You’ll also need dedicated writers to produce your content, and if your collateral needs exceed your marketing team’s capacity, you may need to hire a freelancer.
Paid Advertising: 20-30%
While much of digital marketing content depends on organic reach—that is, reaching users of specific online outlets without paying for the privilege—paid advertising gives enterprises a leg up in the market. It’s especially important for brands that want to establish a market presence or enter an entirely new segment of the market.
For example, your company may have developed a new product targeting a drastically different buyer persona than you normally do. Paid marketing, be it in the form of online cost-per-click ads, social media ads, print ads, or even TV or radio commercials, can help you get attention right away, whereas unpaid, “organic” marketing may take longer to reach your intended audience. With paid advertising, you directly pay the channel that you’re advertising on for access to their audience. And if you do your research, you’ll know exactly which ones to invest in to reach your target audience. These outlets typically provide the statistics you need to first calculate the ROI of placing an ad with them. An ad that costs money to place and then has another per click cost is only worth the investment if you are guaranteed to reach prospects with a high rate of likely conversion.
While sometimes an afterthought in the age of “free” marketing, paid advertising provides some of the most direct and immediate measures of ROI available. That is, you can count dollar-for-dollar exactly which advertisement brought in a certain number of conversions or a certain amount of revenue. Digital advertising is especially worthwhile, given the ease of publishing ads and the fact that the biggest channels (e.g. Facebook, LinkedIn, Target) offer excellent targeting options.
Workforce Marketing: 10%
Your workforce is an extremely powerful part of your marketing arm. Workforce marketing consists of aligning every member of your team behind company goals through increased education and advocacy-strengthening efforts. It might include internal meetings, events, and marketing collateral that “sells” employees on company culture and goals. These things don’t come free, but they’re well worth the investment as you build up employee knowledge, motivation, and morale. Beyond the this, the internal goodwill can be a major force in attracting both new leads and new hires.
Consider implementing an employee advocacy program, where you can invest in morale-building, educational seminars or create a free competition among departments. Allowing your employees to market for you enables you to reach new audiences and entices prospects on a personal level. As an internal investment, the ROI can be measured by tracking the number of leads brought in through your employee advocacy program. With a robust marketing automation platform, you can set social referral campaigns across major social media platforms that tracks referrals and their corresponding responses. This is also a great program to run for customer advocates as well, but if you’re just launching it, you may want to test the waters on your internal workforce first.
Software and Tools: 10%
Software and tools streamline and automate essential tasks, saving you precious time, money, and human resources, and letting you analyze and refine your marketing activities in much more intuitive ways. With the right solutions in place, you can assess the performance of every campaign and asset that you push out. You can also track key performance metrics to determine the success of each of your efforts for both current and past campaigns, which provides you with clear ROI projections.
For each of your campaigns, you should have your measurement strategies planned in advance since you need to set up the proper tracking–so consider what metrics you’ll want to track and ensure you have the right tools to do so. Some valuable tools for your marketing team might include:
- A marketing automation platform, or engagement marketing platform, helps you streamline, automate, and measure your marketing tasks and workflows to increase operational efficiency and grow revenue faster. With it, you can increase demand, engage your buyers throughout the entire customer lifecycle, and measure the effectiveness of each campaign and channel.
- A content management system (CMS) provides an efficient means of letting the right individuals in your organization publish and organize content across your web presence.
- A customer relationship management (CRM) tool provides complete oversight and detailed recording of buyer interactions and touchpoints, letting you track a customer’s progress through your sales funnel and enabling close analysis of what works in each relationship. By syncing your marketing automation platform with your CRM, you can improve sales and marketing alignment so that both teams are always up to date on each prospect’s interactions with your company.
- A social media management platform lets you manage your social campaigns by setting an editorial calendar, allowing you to monitor real-time social media conversations about your brand, products, and industry, identify immediate engagement possibilities, and analyze the impact of participation across each social platform.
Most importantly, these tools provide you the analytics and insight you need to determine and prove ROI. Although you can calculate some metrics manually, the bigger your marketing efforts grow, the more you will need the technology to handle all the data points flowing in from various places about your customers. The investment in this technology is the upfront portion of working out how ROI fits into your budget.
A corporate presence at large industry events or your own company’s events can quickly deepen your market presence, showing prospects that you’re a real-world company with a unique identity. Events, be it tradeshows, conventions, conferences, or roadshows, can be prime opportunities to show prospects and customers, in a personal setting, why you and your solutions matter.
Costs can include registration fees, travel expenses, and collateral. Hosting your own event includes some of the above, plus venue rentals, catering, promotions, and other miscellaneous operating fees. It’s fairly simple to track how many fruitful conversations result from in-person contact. The impact of an event is measurable in a number of ways. For example, when prospects register for your event, visit your booth, or attend your session, a tangible lead is created.
In the thick of assessing marketing needs and trying to implement new campaigns, you often can’t see the forest for the trees. But with a well-planned budget that breaks down each activity with clear expectations of the investment you’re putting in and the value you’re getting out, you’ll be able to relax and focus on each marketing task, knowing that you’re building a strong foundation for your company’s continued growth.
How do you approach budget allocation in new areas or campaigns? I’d love to hear more in the comments below.