How to Create an Effective Digital Marketing Budget for 2020

Nine out of ten mar­keters expect to increase dig­i­tal mar­ket­ing bud­gets in 2020, but how do you make sure your bud­get is effective?

Dig­i­tal mar­ket­ing has proven itself to be one of the most effec­tive types of mar­ket­ing. Email, social media, con­tent mar­ket­ing, search engine opti­miza­tion — all of these tac­tics are essen­tial to busi­ness suc­cess in 2020.

It’s prob­a­bly why as many as 95% of orga­ni­za­tions have increased their dig­i­tal mar­ket­ing bud­get in recent years – and why nine out of ten mar­keters expect that their bud­gets will grow in 2020 as well.

That said, dig­i­tal mar­ket­ing is very com­plex and involves numer­ous strate­gies, all extreme­ly impor­tant. As con­sumers increas­ing­ly expect omnichan­nel expe­ri­ences and want to be able to reach brands on all their pre­ferred chan­nels, mar­keters have the big chal­lenge of stretch­ing out that bud­get for count­less chan­nels and strategies.

So how do you cre­ate a bud­get that ensures your mar­ket­ing strate­gies will thrive?

Identify your marketing objectives

What are your main goals this year?

The best way to start plan­ning your bud­get is to be very clear about your goals for the upcom­ing year (or quar­ter). Hav­ing goals in place will allow you to pri­or­i­tize the tac­tics that you should focus on the most.

For exam­ple, if you want­ed to grow the busi­ness web­site and gen­er­ate more busi­ness from it, then you should invest more in pro­duc­ing high-qual­i­ty con­tent, lever­ag­ing con­ver­sion opti­miza­tion to boost con­ver­sions on your web­site and invest in bet­ter search engine opti­miza­tion to boost tar­get­ed traf­fic and any oth­er tac­tics that dri­ve tar­get­ed traffic.

 Audit your past results

Once you know what you want to achieve this year, you should look at your past results to help inform your 2020 strat­e­gy and budget.

Using the same exam­ple as before – gen­er­at­ing more busi­ness from your web­site – in order to iden­ti­fy the best tac­tics to achieve that goal, you should audit your past results to see which chan­nels and tac­tics per­formed best in the past, as well as what hasn’t worked as you’d want­ed it to. Which chan­nels drove the most (tar­get­ed) traf­fic? Which ads gen­er­at­ed the most leads? And so on.

For exam­ple, some of the things you’d need to look into:

• Which chan­nels dri­ve the best results, con­sis­tent­ly, based on your mar­ket­ing objec­tives? These are the chan­nels you’ll want to con­tin­ue to invest in and even increase your spending.
• Which chan­nels aren’t per­form­ing well enough? If you’ve tried out cer­tain chan­nels and they’re sim­ply not pro­duc­ing results, it might be worth remov­ing them com­plete­ly from your strat­e­gy or cut­ting down the budget.
• Which mar­ket­ing tac­tics have you used in the past? What was your ROI (return on invest­ment) for each of these tactics?

When per­form­ing this audit, keep your goals in mind so you’ll know which tac­tics will actu­al­ly help you achieve these objectives.

That said, if a strat­e­gy didn’t work out for you as you’d hoped it would, that doesn’t nec­es­sar­i­ly mean that you should alto­geth­er remove it.

For exam­ple, your SEO efforts in 2019 might not have worked out as you’d want­ed. Still, search engine opti­miza­tion is a must when it comes to dig­i­tal mar­ket­ing so instead of com­plete­ly remov­ing it from your bud­get, you should instead try to under­stand why it didn’t work and what you need to do to improve results in the next year.

For exam­ple:

• Your bud­get might not have been high enough for all you want­ed to achieve and you should, in fact, allo­cate a big­ger bud­get in the future.
• You haven’t used the right approach: eval­u­ate your entire approach to under­stand why it’s not per­form­ing as it should.

 Evaluating your options

As men­tioned ear­li­er, dig­i­tal mar­ket­ing is a com­plex prac­tice, with numer­ous tac­tics and strate­gies – and many of them are must-dos in 2020.

As you can see above, SEO and con­tent mar­ket­ing are the top of the list for most mar­keters. That said, there are plen­ty of mar­ket­ing strate­gies that you’ll like­ly need to put into prac­tice in 2020, including:

• Search engine optimization
• Busi­ness blogging
• Video mar­ket­ing
• Social media marketing
• Email mar­ket­ing
• Mar­ket­ing automation
• Con­ver­sion optimization
• Per­son­al­ized mar­ket­ing (par­tic­u­lar­ly impor­tant for eCom­merce businesses)
• Influ­encer marketing

When eval­u­at­ing all of these options and allo­cat­ing their bud­get, the most impor­tant thing to do is to con­sid­er your:

• Mar­ket­ing goals and over­all busi­ness objectives
• Past results for each of these tactics

Allocating your budget

So, what should your mar­ket­ing bud­get be?

Ide­al­ly, it’s rec­om­mend­ed that your mar­ket­ing bud­get is some­where between 7% to 15% of your total busi­ness rev­enue – the sweet spot is around 9–10%.

Once you know exact­ly how much your bud­get is and have a list ready all of the dig­i­tal mar­ket­ing strate­gies to use in 2020, it’s time to start allo­cat­ing that bud­get to the var­i­ous tactics.

As I men­tioned before, it’s best to allo­cate the bulk of your bud­get to any tac­tics that have proven suc­cess­ful in the past, while also ensur­ing that they’re in line with your goals.

There is no solu­tion that works for every­one – each busi­ness is dif­fer­ent and rec­om­men­da­tions will vary con­sid­er­ably depend­ing on your indus­try and niche, your busi­ness goals and of course, your actu­al bud­get. That’s why you need to keep all of these things in mind when you plan your bud­get and allo­cate resources.

Don’t forget about marketing software

Mar­ket­ing is almost impos­si­ble with­out tools and soft­ware to help. You need tools for a vari­ety of mar­ket­ing tac­tics and it’s some­thing that you should look into in great detail, every time you plan a new bud­get or strategy.

Here is a run­down of the most impor­tant mar­ket­ing tools and soft­ware you need to con­sid­er invest­ing in:

• Social media marketing/management software
• Project man­age­ment and col­lab­o­ra­tion tools
• Email mar­ket­ing tool
• Mar­ket­ing automa­tion software
• Per­son­al­ized mar­ket­ing software
• Out­reach tools
• Con­tent cre­ation tools: video cre­ators, graph­ic design soft­ware, and so on

 Save some for trying out new strategies