We’re almost the end of the year and we all know what that means. It’s time when you need to take a deep dive into planning your annual digital marketing budget. If you manage and execute most of your marketing activities in house, or if you outsource to a marketing agency, your digital marketing budget is the wellspring for your annual strategy. It will go a good long way towards explaining your performance in the forthcoming year.
A new year is a new beginning. It brings opportunities for growth as well as change in your digital marketing strategies. You could be entering new territories, launching new products or trying out new marketing channels in order to build brand awareness.
In fact, according to a recently conducted study regarding the state of content marketing, 62% of digital marketers are planning to boost their content marketing budget this coming year. More spending means more risk; however it also means far more opportunities.
Work Backwards From The Results You’re Trying To Attain
It’s difficult to broach the subject of budgeting for progress without at least dipping a toe into corporate finance (nothing far too technical here, however this is a post on budgeting). There are a number of different methods which organisations use to build their digital marketing budgets. Some, such as incremental budgeting, have been in use for quite some time, while others, such as zero-based budgeting, are newer to the group.
Traditional Budgeting Methods
- Incremental Budgeting: making use of the previous period’s budget and performance to make changes incrementally to the next period’s budget.
- Rolling or Perpetual Budgeting: maintaining a budget which always lasts for a fixed period of time (for example, having a budget which endlessly forecasts for the next 12 months, whether it’s January or April).
- Ad Hoc Budgeting: rationalising the costs of individual projects as required.
Newer Budgeting Methods
- Zero-based Budgeting: a method of budgeting in which the budget for each new period is built from scratch and every expense needs to be justified.
- Activity Budgeting: using marketing or organisational initiatives costs themselves and the returns they are expected to generate to build a budget (as opposed to incremental budgeting, which looks at how much your organisation spent on an initiative in the previous period in order to budget for the next period)
Ditch The Short-Termism And Fixation With ROI
Budgets need to involve more investment in upper funnel strategies as these help build first-party audiences in addition to setting brands up for longer-term gains. As well, brands dedicate budget to get users to their website, however that’s where it stops.
There needs to be a move in outlook when it comes to this fixation on return on investment particularly when it comes to upper-funnel marketing. Getting users to a site is one part of the strategy but getting them to convert is a bigger challenge. In addition, there is also a reluctance to spend money on website design and CX because you might not see an immediate return, but this is such a vital part of the end-to-end customer experience.
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