How to Calculate Digital Marketing Budget for Your Brand
Defining the right digital marketing budget for your business is a challenge, and, of course, it is crucial. It helps plan your strategies better and allows you to utilize your available resources in the best possible ways. So, to ensure the campaigns function most profitably, creating the digital marketing budget beforehand is pivotal.
But the question is how to calculate the digital marketing budget for your brand’s online advertisements? Well, this at times can be a daunting task for you or your firm, especially if you don’t possess much history and experience in digital marketing.
Plus, if you don’t have a profitable digital marketing budget template with a channel-wise breakdown, which fits into your current requirements and investment capacity, budgeting it for the first time will indeed be quite an uphill task.
This is where this blog post comes into the picture. If you don’t have much clue about how your first digital marketing budget allocation should be, then we have come up with this post to tell you a few easy methods to get started with it efficiently.
Some may fail to understand the importance of each marketing channel and eventually end up allocating more budget than needed. For example, if you invest too much for content marketing in your early days and not enough for the outbound ones, you might not achieve the sales numbers you are aiming for.
Now, to avoid all these pitfalls, follow the digital marketing budget breakdown we have created, especially for you to efficiently manage your digital marketing investments.
So without any further ado, let’s get started.
Five Steps to Quickly Figure out Your First Digital Marketing Budget
First of all, keep in mind that there is no fixed formula or budget for all kinds of businesses under the sun – every business is different, and so is the approach. Ergo, this digital marketing budget template needs to be adjusted as per the business you have and its related factors.
It’s impossible to tell you the exact figures that you need to spend. But we can surely help you get to a number based on which you can frame your digital marketing budgeting strategy.
So, let’s look at it.
Get A Reliable Digital Marketing Calculator
This is the first and foremost important thing. Tools have always made our lives easier with their utilities, and a digital marketing budget calculator can do wonders for you.
There are so many factors involved here to make the final budget, and it might become impossible to do it manually. The calculator tool will have all the categories you need to develop a prospective figure for everything related to digital marketing.
Since every business is different, this tool allows you to browse through the various options and digital marketing templates to decode the right allocation for every single aspect.
All you have to do is feel in the details, and voila – you will have a figure!
Please keep in mind that the figure you will get from the digital marketing budget calculators only indicates a possibility and nothing absolute. Therefore, take this figure into primary consideration while you set up the campaigns.
Determine Your Projected Revenue
This is the second most crucial part. When you have the calculator in place, now just start the process by determining your projected revenue or what you aim for.
If you own an established brand, this will be very easy for you to measure since you would already have a ton of experience and previous sales numbers to refer to. However, if your venture is relatively new, then forecasting such a number can be a bit difficult.
In such a scenario, it is always advisable to deal with the two different sides of the story. One is definitely the more aggressive side, and the other one is more conservative. Now, you have to consider the best of both parties and come to a conclusion.
Select Your Industry
This is the next and one of the most critical aspects of the entire digital marketing budget calculation. Understanding the industry in which your business belongs is very important to determine your online marketing budget.
After all, if you don’t know the industry, how can you judge whether your budget has crossed the industry standards or not!
Hence, in the digital marketing budget calculator, you must choose the industry from the dropdown menu, which best encapsulates your company and the line of business you are dealing with.
With this, you can understand and modify the budget based on the digital marketing budget of other similar companies of the same industry. It is quite obvious that there will be differences even among companies belonging to the same industry, but still, this will give you a fair idea about how things work.
Select Your Business Model
Next is the more specific details – details that can make or break the budget. Now you need to select the business model you have on the calculator. It can be a B2B service, B2B product, or B2C service, B2C product. This final input will determine the prospective figure you might get to have the perfect digital marketing budget allocation.
You might have already seen the Investment Summary Table of various other companies. If you haven’t, you can check out some resources on the internet to gather some ideas about how it actually looks like. There you will get the number of total marketing expenditures against the total number of digital marketing expenses. You may even see that some put more importance on online activities than the traditional ones.
Nevertheless, if you have a new venture or start-up, digital marketing is the best bet you have just for its ease of operation over traditional marketing methods. After all, you can figure out yourself how difficult and costly it could be to get a hoarding put up in a posh area of your city than getting multiple profitable PPC campaigns running.
So finally, after putting all the details, the calculator can predict a possible digital marketing budget. First, you will get the amount you may need to spend on various paid media campaigns such as paid search, display, and paid social. On the other hand, you will get the budget you might need to cover the organic digital marketing channels like SEO, content marketing, etc.
Use the Number to Frame Your Own Digital Marketing Budget and Strategy
Now you have the perfect digital marketing budget breakdown you needed. The only thing left to do is to form an ideal digital marketing strategy around this number.
Because, no matter how perfect your internet marketing budget might be, it’s still useless without the perfect campaigns.
The figures you have received through the budget calculator now need to be transformed into the best strategies. Meaning, you need to figure out the media channels you will use based on the number you have from the calculator. This is the time when you need to think about whether to invest in Google Ads or SEO, Facebook or Instagram, content marketing or email marketing, etc.
You may also have to fathom if social media is going to be much more effective for your business or not. In that case, you might have to invest more in various social media marketing channels.
Then you need to figure out the organic side of the marketing as well. Would you like to bring on board an in-house content team, or will you hire a full-stack SEO company instead?
Tough call, isn’t it?
Moreover, an ideal digital marketing agency with a great team won’t come cheap. So, if you need a good agency that can take care of all the organic and paid media campaigns, the budget should be likewise distributed to acquire the targeted results.
Always keep in mind that SEO, content marketing, branding, etc., are long-term processes. So when you think about how to calculate a digital marketing budget, your thinking should be long term as well.
Studying the average digital marketing budget by the industry on the internet can be helpful but remember that each business is unique, and hence it requires some strategic modifications.
Also, the budget calculator is only here to give you a prediction and not something concrete or absolute. Just get the number, understand the industry standards, and devise your campaign budgets wisely.
The best thing about digital marketing is that it is always flexible. Hence, don’t think that you cannot restructure the budget later if you need adjustments. The market is ever-changing, so you are always free to modify your digital marketing budget allocation.
I believe, after reading this post, allocating the budget for digital marketing is not going to be a great challenge for you anymore. You can definitely take these tips as something to start with if you have no clue about it whatsoever.
Finally, let us know your views in the comment section below. Or, if you have experience in this, feel free to share the digital marketing budget template you use in your case. Your suggestions will be valuable for millions of businesses looking for ways of creating their digital marketing budget breakdown.