In this day and age, marketing is all about dominating the digital space. According to Forbes, over the next five years, businesses in the United States will spend 120 billion on digital marketing alone.
Yes, you read that right. 120 Billion. With a “B.”
This spending shows the direction marketing trends are taking. With all that money swirling around, it’s important that businesses employ sound strategies to manage their marketing budgets.
We’ve compiled a list of some of the best strategies your company should be using to manage your budget smartly.
Budget, Plan, Forecast, and Actual
It may seem obvious, but many businesses overlook this essential, yet ever important step.
Using a three-pronged approach to managing your budget is a surefire way to ensure you spend your money wisely and that you’re on track with expectations.
Your budget dictates where to allocate funds over an extended period, such as a year. It should be directly inline with your goals. Once you set your budget, it should remain untouched. Knowing that priorities change, you now introduce the planning portion.
The planning stage is where you can make changes and indicate where you need to spend more or fewer funds. Planning allows you the flexibility to grow with the changing business environment. This part of your budget is perfect for quarterly planning.
The “Forecast” portion is where you input what you actually spend on each area. You should update this mid-month, and when the month ends, you change this over to “actual.”
Using this strategy helps keep a clear focus on spending and your needs as they change.
Diversify Your Budget
Diversifying a marketing budget is an excellent way to make sure you’re hitting all the vital areas for growth.
A good rule of thumb to start with is the 70/20/10 rule.
This rule dictates that 70% of your marketing budget is devoted to tried and true methods. This area would include strategies or products that have a proven ROI time and time again.
20% of the budget should be allocated to safer bets, perhaps products that are newer on the scene but shows real growth potential.
10% is devoted to experimental channels, ones that with some risk, may lead to significant payoffs.
By employing this strategy, you are making sure you’ll hit your marks monthly, quarterly, etc. but also leave room for expanding and getting in on new and profitable trends.
Feel free to change the percentages around, as this is just a general guideline. Do what works for your business and risk tolerance.
Check In Often
Any successful business will tell you a budget should not only help manage your money but provide important insight as well.
To fully utilize the knowledge your budget can give you, you need to check in often. Experts suggest checking in on your spending middle of the month, end of the month, mid-quarter, end of each quarter and yearly.
By taking full stock of your corporate accounting, you can avoid surprises and adjust accordingly.
It’s also important is to analyze your ROI by employing services such as Google Analytics to make sure your methods are working, and that you’re on target.
While just one of the strategies can help you better spend your marketing money, using them in conjunction with each other is an excellent way to maximize your ROI potential.
Use these three strategies for managing your digital marketing budget, and you’ll be sure to have wisely spent your portion of that 120 billion over the next five years.