Important Factors to Consider When Determining Your Marketing Budget

By in Online Marketing,

As we turn the calendar to 2021, we’re facing a variety of challenges throughout our society that have a significant impact on many business owners. The COVID-19 pandemic is still ravaging the country and as a result, we face uncertain economic times. However, these challenges also present an opportunity for your business to establish a new relevance in our changing world and position itself for success moving forward. Your marketing strategy is a crucial tool to leverage this opportunity.

Creating an annual marketing budget is always an important task for every business. In order for your business to continue to grow and thrive, you need to retain loyal customers and experience an infusion of new customers who will hopefully remain loyal to you for years to come. This requires you to get the word out about the products and services you offer, as well as why your company is the right provider to choose. Without an adequate marketing budget, you won’t be able to raise the awareness necessary to grow your business.

Why Do I Need a Formal Marketing Budget?

It’s one thing to understand the need to invest in online marketing efforts. It’s another thing to take the time necessary to thoughtfully plan out this budget so that you know precisely what you can spend on marketing and which channels you plan on devoting these resources to. While this level of planning requires a lot of work, it will be well worth the time. You’ll experience a variety of benefits when you create a formal plan for your marketing budget:

View Your Marketing Budget as an Investment, not a Cost

series of blocks with the "growth" block highligted in yellow - digital marketing budget is an investment in the growth of your companyMany companies view their marketing efforts as a cost, and this can be problematic. While it is true that your marketing budget must be included as part of your annual business expenses, viewing them as a “cost” may cause you to look for ways to cut corners on this expenditure. This is especially true during an economic downturn when money may be tight and you’re operating on smaller margins than you’re typically used to.

Instead, it’s important to see your marketing efforts as an investment in the ongoing growth and success of your business. Creating a budget will let you use this money more effectively and creatively in order to get the most out of this investment in your company’s future.

Your marketing strategy is the most effective tool at your disposal to tell your company’s story, grow your brand and build stronger relationships with your customers. When you cut back your marketing efforts, you’ll become less visible to current and future customers, and your brand won’t resonate as strongly with your target audience. Over time, this can lead to significant customer attrition rates.

Many of your competitors may cut back on their marketing budgets in 2021 due to the economic crisis we’re currently facing. However, it’s important that you resist the urge to follow suit. Instead, by maintaining or even increasing your marketing budget for the upcoming year, you have an opportunity to remain relevant with your audience at a time when your competitors may be falling off their radar.

This will pay huge dividends as our economy recovers following the pandemic. Studies have demonstrated that by investing heavily in your marketing budget during a recession, you’ll be better positioned to thrive long term compared with companies who don’t keep their brand on their customers’ minds during an economic downturn.

What Does Your Marketing Budget Pay For?

When planning out your 2021 marketing budget, you may find the overall dollar amount to be a bit shocking. However, it’s important to remember that running a successful marketing campaign is expensive for a reason. There are a lot of costs that need to be covered by this budget:

Factor External Costs When Establishing Your Marketing Budget

While the list above highlights the many costs associated with running your marketing campaign, we also realize the amount of money you can allocate to these expenses are largely dependent on the other costs associated with running your business, including:

These costs, along with your marketing costs, impact your profitability and determine how much money you can invest in specific services. These costs will also help you set up benchmarks for desired ROI on your marketing efforts.

Establish Goals for Your Marketing Efforts

blocks saying 2021 goal, plan, action - set your 2021 digital marketing goalsIt’s important to establish goals for what you’re trying to achieve with your marketing efforts. Without clearly defined goals, you won’t be able to determine a reasonable budget to help achieve them.

Some common goals for a marketing campaign include:

Make sure your goals are specific. Generic goals such as “increase leads” won’t help you determine how much money it will take to reach your goals or provide a framework to measure the success of your efforts. A more specific goal such as “increase monthly leads by 25%” is easier to measure and gives your team a precise target to reach. By establishing the percentage of increase you’re looking for and the specific timeframe you want to measure, you’ll have a better sense of what it will cost to achieve your goals.

Determine the Best Strategies to Use

There are a wide range of digital marketing strategies to choose from, and not all of them will be appropriate for your business. The right strategies for you will depend on the specifics of your industry, your target audience and the marketing goals you’ve established. Rather than spread your resources thin across every possible strategy, it’s better to choose a few that are ideally suited to your goals.

Some potential digital marketing strategies to incorporate into your budget include:

Research Marketing Provider Costs

Once you decide which strategies you want to use, you’ll need a team to implement them. Whether this is done by an in-house marketing team, a digital marketing agency or freelance marketing professionals, you should understand how much each option will cost you.

Consider the following factors when determining the cost of each option:

The right solution for you will depend on the unique needs of your business as well as the amount of money allocated to your annual marketing budget. By researching the costs of all these solutions, you’ll have a better sense of what you can afford and what you can expect to get for your money.

Webolutions Can Help You Get the Most Out of Your 2021 Digital Marketing Budget

Webolutions is a Denver digital marketing agency providing the robust services you need to get the most out of your budget. As part of our process, we encourage all of our clients to engage in annual planning with us. During this meeting, we explore your upcoming marketing goals in order to develop a customized campaign to achieve your desired results. We’ll then establish a set of metrics to measure the success of your campaign over time.

Over the last 25 years, we’ve refined our approach to reflect the evolving digital marketing landscape. This has enabled us to elevate our clients’ messaging so that they continue to grow and thrive year after year. Our approach incorporates the following pillars of effective marketing:

Please contact Webolutions today to find out how we can help you get the most out of your 2021 digital marketing budget. We serve clients nationwide from our offices in Denver, Colorado.

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