Four score and 4,000 words ago, we began our in-depth series on the necessary elements that should be considered as part of any business’ digital or inbound marketing budget.
Ok, maybe it wasn’t that long ago, but before we wrap up, here’s a quick refresher course of how far we’ve come:
In Part 1, we learned that setting a budget requires deeper thought than picking a percentage of revenue. It requires taking a hard look at what type of growth the organization needs and working backwards to understand the software, platforms, and tools necessary to reach those growth objectives.
Part 2 focused heavily on identifying the specific talent an organization will need to buy or build in order to leverage the tools and and execute the strategies discussed in Part 1.
Now, to round out and conclude this series, Part 3 will shed light on the typical investment needed to execute paid, traditional, and contingency-based marketing activities.
Understanding a Paid Marketing Budget
Paid Marketing or Pay-Per-Click (PPC) is an umbrella term covering three dimensions of digital advertising that require a constant, day-over-day, month-over-month investment of money to support the placement, visibility, and effectiveness of your ads. Think Google AdWords or even Social Media advertising.
Leveraging each one of these dimensions is critical to a well-balanced marketing engine, but is heavily dependent on the type of organization, the customers served, and the speed at which the organization needs to grow.
Let’s first (and quickly) break down each area of paid marketing:
1. Paid Search Marketing or Search Engine Marketing (SEM)
Paid SMM uses your ad dollars to push messages to highly targeted audiences that may or may not already be engaged with your brand.
Almost every social network (including YouTube) has their own variation on the types of ads that can be produced, how they’re displayed, who they’re displayed to, and the costs associated with advertising.
This contrasts in many ways with SEM in that advertisers are jockeying for more resonance within a target audience versus a position within a results page based on a specific keyword.
Investing in retargeting allows advertisers to “follow” those that have previously engaged with their brand around the web or social networks by having their ads continue to display basically everywhere they navigate to on the web (i.e. Facebook) in order to promote RE-engagement.
Which is Best for me?
Next, let’s take into consideration a few things that will help you identify the level of investment needed based on the above criteria:
type of organization
speed of growth.
Now, I understand that the examples below are quite general, but the goal of this section is to get you to think about the type of paid marketing you should be leveraging and the potential associated costs of month-over-month investment. For example:
If you’re a B2B startup company with a bootstrapped budget and a greater focus on steady, long-term growth, consider leveraging more of your investment in writing talent (discussed in Part 2), to help you produce more and better content to drive organic results.
However, you should still begin testing PPC waters with a very small budget using paid social ads. Sometimes, the social network will give you free advertising credits to experiment with. If you see the value for this kind of company, a $250 - $500 per month budget would be a healthy start to determining if paid media is a good route.
If you’re a VC (venture capital) funded, B2C retail product company with short-term, hyper-growth goals, paid media should be line item number one on your budget document.
It’s been proven time and time again that an inbound / content strategy is a great way to drive traffic over time, but an immediate and consistent boost in traffic and leads for this type of company would require a heavy investment in all three dimensions of paid media listed above. This could mean spending upwards of several thousand dollars per month across multiple platforms.
Lastly, if you’re a highly established, publicly traded, B2B brand selling a complex software solution and you’re attempting to preserve your search rankings for highly competitive keywords, paid search must be at the forefront of your paid media strategy.
Your monthly spend will be dependent on the level of competition for specific keywords. For larger organizations, this may lead to tens of thousands of dollars spent each month to edge out their competitor’s ads by one spot.
But Why Budget for Paid Media?
The answer is two-fold and simple… Cut through the noise and increase your speed-to-market!
It is quite apparent that as content marketing has become more and more a part of every-day marketing life, it’s leading to a world of content saturation, clutter, and noise.
Ideally, only the best and most engaging content will surface to the top of Google (or any platform for that matter), but the reality is, that doesn’t usually happen!
This means your post, no matter how brilliant, may be relegated amongst the thousands of others.
By pushing ad dollars to Google or Facebook or even LinkedIn, you can boost the visibility and reach of your content almost instantaneously and even target exactly the types of people you want to see them (in other words, your buyer persona).
It’s basically like turning your guitar amp up to 11 and allowing your solo to cut through the drum and bass lines, reaching the audience in the far back of the room.
What this boils down to is that including paid media in your budget is as important now as it ever was. It just needs to be leveraged in a way that will help you maximize the ROI of valuable things you’re already creating, especially when you’re first getting started with content and digital marketing.
Evaluating Your Traditional Marketing Budget
Now that we’ve outlined everything you need to include in your modern marketing budget, you need to understand how to start implementing it.
Before you start investing in paid ads or any of the elements we talked about, you may need to evaluate and remove certain items from your current marketing budget.
For many organizations, traditional marketing activities have been a staple of the marketing budget since their company’s inception. These activities typically include, among many others, hosting or attending trade shows, launching press releases, and developing small and large-format print advertisements.
This section will help you determine if there are parts of this traditional marketing budget that should be omitted or reallocated based on the results of your past efforts or shifts in your industry that are rendering these tactics less effective.
A Case for Budget Reallocation
Here’s a quick example.
With MANY of the companies I speak with during the sales process, I’ve been told that trade shows are no longer producing the same level of results in comparison to five years ago.
In fact, trade shows for them have been relegated to a brand exercise, in other words, “We’ve gone every year and feel like we have to be there for recognition.”
While there’s absolutely equity in building brand recognition, attending a trade show for the sake of attending may end up costing you more than the sum of the show itself. This is because those critical marketing dollars may have a greater ROI being reallocated to hiring a new person, buying a software to make your department more efficient, or boosting a new campaign with social advertising; something with a more immediate, and measurable return.
Thi is just one example, but take the time to evaluate the results of your traditional marketing efforts (if you even have the data behind it), and consider how your marketing budget may go further by reinvesting in newer, more “trackable” tactics.
Building a Contingency Marketing Budget
In Part 1 of this series, I mentioned I’m an HGTV geek. No shame there...
The reason I bring it back up here is because in most home remodeling, they build in a contingency budget. This is obviously for when something with the build goes awry like:
Out-of-spec electrical work behind walls…
A cracked main stack pipe for drainage…
The owner wanting to upgrade to real hardwood floors from the already budgeted engineered hardwood...
These same surprises, changes, or upgrades can (and should) happen within any marketing organization. This is why it is imperative that every marketing budget include a line item for “Contingency.”
Below are four key categories that should factored in as part of your contingency marketing budget:
1. Last Minute...
Every one of us reading this article knows that something always surfaces at the last minute. It could be an order from the CEO or maybe a discovery of a better way to do something.
The trouble is that in these cases, last minute means that whatever is being worked on has already been scoped for a certain cost and timeframe and is most likely nearing completion. To execute these last minute changes, you’ll need some great communication skills along with additional budget.
Having a “last minute” contingency built into your total marketing budget is a great way to ease the burden during these situations.
2. Advanced Customization
This is particularly important for everything we discussed in Part 1 about choosing the right software, tools, or platforms from which to build your marketing engine. Many of these bits of technology are perfectly suited for your organization right out of the box.
In some cases, like making sure the data from one platform is syncing properly with the data from a completely separate platform, you know that by adding an additional feature or customizing it to match your specific business needs, can make you and your team members’ lives much, much easier.
Have you and your team ever been so close to a project that you sometimes become blind to the things that are preventing that project from being the best or error free?
At that point in time, it’s time to get a fresh set of eyes on your content.
A proper investment here can mean many times the return especially when it comes to conversion rate optimization and interface design.
4. Additional Growth / Grow Faster
Finally, and perhaps the most important part to consider as part of your marketing contingency, is arming your marketing department with the ability to move faster - to double-down.
The beautiful thing about digital marketing is that almost every activity can be measured with the proper tools in place.
If, through your analysis, you’re finding that your paid social marketing results on Facebook are generating exponentially greater returns that are increasing month-over-month, it should come as no surprise that more budget SHOULD be allocated there.
Including a “growth acceleration” category within your budget is the right way to assure that you’ll never miss an opportunity to generate even greater results.
So there you have it; my comprehensive breakdown of what to include in your marketing budget in this modern age. From paid ads to software and talent, there are many aspects to consider and it can be a bit overwhelming.
Need help planning your next step? Let’s talk. I’d be happy to help you understand your goals, how they can benefit from digital or inbound marketing, and how to plan your budget.
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