Whether it includes investing in email, social media, or SEO, digital isn’t just the most cost-effective (and measurable) form of marketing, it’s essential to the success of your organization. According to the Digital Marketing Institute in fact, no small business should overlook digital channels as a way to generate leads and convert them to customers.
But while the aim of digital marketing is to earn new customers online (often by driving qualified traffic to your website)—the key is to generate the highest possible return-on-investment with a cost-per-conversion that makes sense for your budget.
In 2020 alone, the digital ad-spend in Canada amounted to some $8.45 billion. With so much at stake financially, how can you be sure you’re prioritizing the right advertising channels?
Here are 3 tips to keep in mind when allocating your digital marketing budget.
Tip #1: Meet your audience where they’re most active
One of the best ways to ensure you get the most bang for your marketing buck is to budget around digital platforms that your target audience is actively using.
If you haven’t already, you should:
- Clearly identify the type of people most likely to buy your products or services (by creating marketing personas, for example)
- Conduct marketing research to better understand your audience’s online behaviours and buying habits (Are they influenced by emails, blog articles, social likes? Do they purchase via mobile or desktop devices?)
- Determine how customers typically find your business, or other companies similar to yours
Don’t forget to also include a CRM or analytics tool in your budget so you can boost your knowledge about your audience and monitor the results of engaging with them.
Tip #2: Leverage a mix of organic and inorganic marketing
It’s a good idea to not only rely on a mix of digital platforms, but to leverage a blend of organic (inbound) and inorganic (outbound) marketing as well.
- Outbound marketing consists largely of paid internet ads and promotion (including search, display, video, sponsored, and social media ads)
- Inbound marketing, on the other hand, occurs naturally as you build brand awareness through content (think: blog posts, social media updates, email newsletters, and other SEO initiatives)
Although it sometimes takes longer to see results using organic marketing measures, content-based initiatives usually cost less to put into action. This makes them an excellent way to diversify and balance your digital marketing budget.
Tip #3: Focus on channels that promise the most conversions
Make sure you set aside extra room in your budget for those marketing channels with the strongest conversion rates.
For example:
- Research suggests that the average paid search advertising conversion rate across industries is 8.82%
- Marketing statistics show that landing pages offer the highest signup-form conversation rate at 24% (vs just 4% for popups)
- Multi-year conversion rates indicate that top organic vs inorganic digital marketing channels include email (2.8%) vs paid social (2.1%) for B2C—and thought leadership SEO (2.6%) vs PPC/SEM* (1.5%) for B2B
*Pay-per-click/search engine marketing
No matter how you choose to allocate your digital marketing budget, it’s important to track your costs vs earnings by period (monthly and annually), as well as for individual campaigns.
The more proficient you get at analyzing and understanding these financial outcomes, the more effective your ad spend will be for expanding your customer base.
