We’ve come off a rough year and a half. Drastic change is something that we've all become a little too comfortable with, and our annual budgets are just one of many things impacted by everything that was thrown at us.
As things are opening up and slowly returning to normal, the question on many marketer’s minds is: how should I spend my marketing budget to ensure the highest ROI?
Whether you’re in the middle of planning your fiscal year now or are getting started in October, here are a few tips for planning your marketing spend for the following year.
Considerations for Allocating Your Marketing Budget
Many businesses typically take a “what did we do last year?” approach to building their marketing budget allocation every year. And we don’t blame them — after all, this is readily available data that you can use to make decisions. And that’s great.
But it’s also very limiting. It keeps businesses from thinking strategically about other opportunities that might be available to them and prevents them from thinking creatively about ways to improve their return on that budget.
As a marketer, your budget is your key to success! And you want to make sure you get the most from it. To do that, you must be savvy about how you allocate it across multiple tactics and approaches. This requires:
- Taking a good look at which techniques and channels are producing the best (and worst) results
- Basing budgets on the right criteria (revenue, profit margin, etc.)
- Flexibility in how budgets are adjusted throughout the year based on newly presented data
All of this is particularly important now as research by Conductor suggests that 65 percent of marketers anticipate a decrease to their annual marketing budget this year and 86 percent predict that their goals will be harder to reach.
With that said, let’s dive into the eight digital marketing channels to take into account as you build your marketing budget for the year.
8 Digital Marketing Channels to Consider for Marketing Budget Allocation
Today, most brands are spending their marketing dollars in the digital space. After all, that’s where their audience is at. Here’s a breakdown of the top eight channels to consider.
1. Growth Marketing
Today’s successful marketers are no longer spray-and-pray messaging artists who come up with a clever tagline and throw it out on every channel possible.
Instead, they’re super-cool scientists who not only work to better understand their audience’s psychology but also know how to set up and conduct experiments to improve results incrementally to constantly grow an engaged user base. This is known as growth marketing.
According to reports by McKinsey, this approach can cut marketing acquisition costs in half and increase revenue by 15 percent while improving marketing efficiency by 30 percent.
Because of this, we recommend dedicating a majority of your annual marketing budget to growth marketing in the next year (which should include many of the channels listed below, like content and SEO). This means investing in:
- A/B testing: Is this something you’ve known you’re supposed to do but haven’t really pursued? Now’s the time to dig your heels in and get serious about it. Aim for at least 1,000 page views per A/B test, although the more you have, the more accurate your results will be.
- Personalization: Segment your email audiences by defining characteristics (such as location, interest, persona, etc.) and leverage AI-powered marketing tools, such as HubSpot, IBM Watson, and PathFactory, to hyper-personalize every part of your audience’s experience with your business.
- Lifecycle marketing: Investing in growth marketing means focusing all efforts on nurturing and engaging customers through every part of their marketing journey — from optimizing ads in the acquisition stage to reviewing and improving nurture emails for increased engagement.
2. Search Engine Optimization (SEO)
SEO has been a staple of digital marketing for years, so it’s no surprise that it remains top of mind for marketers in 2021–2022.
In fact, according to HubSpot’s 2021 State of Marketing report, SEO was the average organizations’ secondary approach to marketing in 2021.
So yes, SEO should still be one of your top priorities this year, especially since it can take up to 6–12 months to start seeing results from your organic efforts.
Here are a few tips to get you up to speed on modern SEO practices:
- Leverage keyword research: If you’re not doing keyword research, then you may be optimizing your content for phrases and topics that your audience doesn’t even care about. Here are seven tools we recommend for conducting keyword research for SEO.
- Use PPC reports to inform your SEO: Set aside a portion of your ad budget (more on that later) to test keywords for your SEO campaigns. Then, identify your top-performing keywords and work them into your optimizations to rank for them organically over time.
- Focus less on keywords: This may sound contradictory to our first and second tips, but hear us out. First, conduct keyword research to understand what your audience is searching for. Then, rather than focusing on getting every word or phrase in your content, focus your efforts on making sure you’re providing the best value for the reader.
3. Lead Generation
Lead generation is the staple of every successful business. After all, without leads, how will you get customers?
If lead generation is still your top priority, then you’re not alone. According to HubSpot’s 2021 State of Marketing report, it’s also the top priority of most marketers this year.
Because lead generation is key to getting engaged customers, here are a few tactics you can use to hit your revenue goals:
- Create a webinar strategy: Webinars are a great way to generate leads for your business quickly and provide them with valuable insights right off the bat. Just make sure it’s highly personalized and relevant to your persona’s needs.
- Double down on growth marketing: Leverage tools and techniques like dynamic content, highly personalized messaging, chatbots, and interactivity to turn your website visitors into leads effectively and efficiently.
- Offer a better “offer”: Audit all your CTAs and gated content to determine how effective they are at generating leads. Review the numbers and compare the content against your most up-to-date personas and ask yourself: is this still the most valuable piece of content on this topic? If the answer is “no,” take some time to improve it and re-release the most updated version or scrap it entirely and come up with something new.
Find more lead gen tactics, and dive deeper into lead generation strategies that we recommend adding to your mix this year.
4. Content Marketing
Content marketing has become oversaturated in nearly every segment of every industry. However, that doesn’t mean it’s time to ditch it.
After all, according to Finances Online, “In July 2020, B2B marketers claim that content marketing helped them achieve goals. This includes creating brand awareness (87 percent), building credibility/trust (81 percent), and generate[ing] sales/revenue (51 percent) among many others.”
In other words, it’s just time to get smarter about content marketing.
Here are a few tips to help you do content marketing the smart way:
- Less emphasis on more, more emphasis on better: Instead of constantly coming up with new topics and putting pressure on posting more often, reconfigure your strategy to post highly relevant/valuable content.
- Repurpose wherever you can: Not only does repurposed content take much less time and effort to create (thereby increasing the efficiency and productivity of your marketing efforts), but it also typically does better! You can update an existing blog post, turn a top-performing one into a video or podcast, and so much more.
- Don’t just publish, promote and distribute: If you’re not promoting and distributing your content after you publish it, then you’re missing out on a huge opportunity to get it seen. Promote by sharing it on social media, reaching out to influencers in your industry, and cross-posting strategically.
- Leverage interactive content: Today’s audiences are less willing to sit through a 30-minute video or read a 20-minute article unless there’s some opportunity to interact and engage with it. Incorporating fun, interactive elements like quizzes, chatbots, games, and polls into your content not only ensures website visitors stay engaged but also makes them more likely to convert into leads.
5. Attribution Reporting
A key component of any marketing strategy is understanding and optimizing your approach based on audience attribution. After all, if you don’t know what source(s) are driving the best results, how are you going to effectively adjust your approach to improve your ROI?
According to HubSpot, “Marketing attribution is a reporting strategy that allows marketers and sales teams to see the impact that marketers made on a specific goal, usually a purchase or sale.” It’s key to identifying your top-performing channels to put more emphasis on, as well as understanding which channels need additional attention to bring up your results.
There are multiple ways to build attribution reports, and this guide by HubSpot is a great way to dive deeper.
Once you have them built and generating data, here’s how you can best leverage that data to improve your results:
- Improve lead generation: Use your attribution reports to see which sources are driving the most leads and understand which sources are lacking. This should drive your decisions on how to allocate your marketing resources.
- Optimize lead nurturing: Use your attribution reports to understand which methods of lead nurturing result in the highest customer conversion rates.
6. Video Content
For years, we’ve been hearing that video is taking the digital content world by storm. And in 2021, that’s more true than ever.
According to FinancesOnline, “By 2022, more than 80 percent of consumer online traffic will involve video watching (Cisco, 2020).” And according to HubSpot, 86 percent of businesses are already using video in 2021.
Because video isn’t going away any time soon, it’s critical to continue allocating some of your marketing budget to it.
Here are some tips to help you keep your costs down while engaging your audience:
- Go live: Live video streaming is one of the most popular, and most cost-effective, ways to leverage video in your marketing strategy. Whether it’s a live webinar or a more informal live video on your social media page, live videos allow your audience a way to connect with your business in real time.
- Repurpose your best blog content: We’ve already mentioned this above, but it’s worth repeating. Repurposing your best articles allows you to trim your budget by preventing the need to rewrite the script. Plus, since the article did well, you already know your video has a better chance of success!
- Leverage user-generated content: Whether you get influencers to live stream your product or you ask your customers to submit videos of their real-life experiences, leveraging user-generated content allows you to not only get footage for free but also engage with your customers in a fun and unique way.
7. Social Media
While the individual platforms may change in popularity, the overall channel is still one of the top sources for generating brand awareness and even nurturing your existing audience into customers.
While only 39 percent of businesses plan to invest in social media this year, it’s still worth incorporating into your overall marketing mix to ensure a consistent brand experience, especially since that’s where your audience hangs out.
Here are a few tips to make the most of your social media budget:
- Conduct a social media engagement analysis: Review your current engagement across all your social media platforms and identify what types of content does best and where. Identify which channels and practices work best for your business and incorporate that into your strategy for the upcoming year.
- Use social listening and engage with brand mentions: Leveraging social listening tools like Mention and Sprout Social allows you to find instances of your audience talking about your brand and gives you the opportunity to engage with them, even if they haven’t tagged your company directly.
- Test, measure, and test again: Don’t get comfortable with posting the same posts across multiple platforms or even with posting the same type of content time and time again. Test different types of posts, measure your results, and retest to continuously improve your results.
8. Paid Advertising
While it shouldn’t be the cornerstone of your marketing strategy, paid advertising is still a critical component of every successful growth marketing plan. Whether it’s to promote your content or keep your audience engaged across multiple platforms, paid digital media will ensure your brand remains top of mind for your audience.
At least 10–20 percent of your marketing budget should be allocated to a paid digital media spend to boost your efforts and ensure the effectiveness of your campaigns.
Here are a few tips to make the most of this budget:
- Retarget your audience for best results: Spend a good portion of your budget on retargeting website visitors. This audience has already interacted with your brand and will be more likely to engage again.
- Leverage your paid results for organic efforts: This has been mentioned previously as well, but it’s worth repeating that PPC ads allow you concrete data that you can use to optimize your organic search efforts and improve results from that channel.
Determining the Right Mix for Your Business
No two businesses are the same. And as such, no two marketing budgets will be the same.
The key to success when determining how best to allocate your marketing budget for the year is to ask yourself the right questions:
- Which channel(s) and tactic(s) produced the best results for us last year? And the year before?
- Which channel(s) and tactic(s) performed the most poorly last year? And the year before?
- How much of this budget can I dedicate to testing and experimenting this year?
- What are my goals for the year and which tactics are most likely to help me reach those goals?
Asking yourself these questions will ensure you come up with the best possible strategy for your business.
We’ve mentioned a lot of different approaches for how to spend your marketing budget in the following year. If you’re feeling overwhelmed or aren’t sure what’s the most appropriate approach for your brand, get in touch with the First Page Strategy. We’ll help you develop a strategy that will deliver exceptional results.