2020 sounds like a pivotal year, doesn’t it? It has that new car smell about it – everything seems possible, everything seems fresh and bright, and January makes all of us feel like we can tackle just about anything this year.
While you’re subject to post-holiday productivity, you might want to take on some of the more difficult tasks that lay ahead. The chief among them is definitely devising your 2020 digital marketing budget.
As US businesses are expected to spend over $110 billion on digital advertising this year (which is more than the combined budget of TV and print advertising), you can just about imagine how much money will be circulating the playing field. But where do you come in?
If you’re looking for someone to give you a precise figure, tell you exactly how much ROI you can expect from the investment, and break a specific tactic list down for you – you could be looking forever.
No one can come up with a number for you just like that – and if they try, don’t believe them.
Before you can even begin fathoming numbers, there are several facts you need to focus on. Let’s break them down, shall we?
What do you want?
Before you do anything else (including determining a budget, coming up with a list of tasks, or even writing a single word of marketing copy), you need to know what you want to achieve with your digital marketing efforts.
- Are you looking to sell more products or services?
- Are you looking to reach a new audience segment?
- Do you want to overtake a competitor?
- Would you like to rank better for certain keywords?
- Are you looking to expand to a new country?
Your goals will inform all of your future decisions. For example, ranking better would require you to build more quality links for your website, while making more sales doesn’t need to rely on link building as a tactic at all.
Knowing what you want will tell you where you should be investing, and how much.
Who are you?
In theory, all marketing avenues are open to all businesses, but in practice, this is not quite true. Who you are as a brand has a lot to do with how you market yourself.
Smaller brands might benefit more from exposure on social media, while large and well-established names can turn to PR and editorial marketing, for example.
Take this time to reevaluate what your brand stands for and what sets it apart from similar brands on the market. With that in mind, look at your target audience once again, and see where you overlap the most.
This is also an excellent time to
reexamine the message you want your audience to walk away with – and consider
the medium that would best showcase it.
Where are you?
In the world of digital marketing, knowing who you are up against is crucial for success. If your most fierce competitor is spending ten times more than you are on PPC, and is showing up as the top result (albeit a paid one) for all of the keywords you are chasing organically, you might need to rethink how your audience reacts to paid ads.
Take a good look at who is offering products or services similar to yours and utilizing the same marketing channels. If there are competitors who are marketing themselves through avenues you have not yet explored, and they’re doing well, the time might be to invest in these untapped resources as well.
Analyze your competitor’s efforts thoroughly – as this initial research can feed your digital marketing efforts for the next six months or even a year. Look at the content they produce, the emails they send out, the ads they write, the images they post, the works.
Be aware that not all of their tactics
will be as applicable to you. Nevertheless, knowing what the competition is
doing might uncover a gap in the market or a tactic that you need to be
spending more on.
Where have you been?
Now that 2019 is over, you can put the work you’ve done last year to very good use.
Take some time to explore what your digital marketing budget was spent on and how these efforts have paid off.
For instance, you might be investing a lot in a channel that is bringing in a negligible number of conversions, while an underfunded channel might be the source of a lot more converting traffic.
Look at things like lead quality, conversion rates, lifetime value of customers, and, of course, the actual spend per channel, before you decide how you want to spend this year’s budget.
How much can you spend?
Finally, we arrive at the ultimate question: how much money do you have available to spend on digital marketing?
If your instant answer is ‘not much,’ you can choose to do one of two things:
You can invest only in the marketing tactics that yield top results with the least investment involved. Focus on increasing your income through them, in order to acquire more funds you can spend on other tactics. This is a legitimate and highly advisable course of action. It may be a bit slower in returning results, but it is a safe and productive way to do things.
Or, you can look for additional funds to spend on your digital marketing efforts. You can reach for online business loans, which are often a much better choice than the traditional options; you can take out a line of credit, run a crowdfunding campaign, turn to friends and family – and so on.
This course of action can pay off if you
have a very good marketing plan figured out, one that only needs funding to
start generating revenues. In that case, you can return the money lent to you
in a reasonable time frame.
How much should you spend?
While we’ve already established that there is no clear-cut answer to this question, let’s try to provide one nevertheless.
Most businesses are advised to spend between 7 and 12 percent of their revenue on marketing – this should be enough not to hinder your business progress.
On the other hand, if you are very small, these percentages will not afford you much in the world of digital. If that’s the case, you might want to look at things the other way around: figure out how much money you need for marketing and then look at where you can take it from.
Either way works, there is no question about that. All you need to do is work out what your business can afford at this stage, then make sure you choose your marketing channels and tactics wisely.
The world of digital marketing is becoming
more inclusive, more adept at connecting audiences to brands, and more
data-driven with each passing month. Take advantage of all it has to offer, and
set yourself up for a flourishing 2020.