Calculating Your Online Marketing Budget
With online marketing, optimal budgeting is easily a challenge whether you're a new business, a large enterprise or something in between. The Web is young and rapidly changing, particularly with steadily evolving channels like search and newer ones like social media. Add to that a fragile economic climate and it's just gas on the fire when trying to deal with a burning question. Moreover, often it's one that needs to get revisited frequently if you're in a volatile space and/or for other reasons... it just needed to get done yesterday.
I've been putting off taking a stab at deploying some tools: Not ones that are laborious or take a long time to use or produce, also not ones that are just another take on some item everyone's seen a million different expressions of already. The best tools address the interesting questions, those concentrating on the realm of how clear and effective ownership paves the way for clear and effective execution.
Though it's one of the tougher ones, the budgeting issue is an important part of addressing the ROI equation. One can't frame how to set goals around desired Return if one doesn't have sufficient confidence in the Investment methodology. For Marketers, having a hand in both sides of the equation is a critical component of determining intelligently how to best deliver business impact, setting and committing to aggressive nonetheless realistically attainable goals, and managing expectations accordingly. Regardless of whether one is working client-side or services-side, the difference between asking "What's my/your budget?" vs. "How is budgeting being approached given the business model and goals?" can set much of the stage for how to pick strategies for success.
As a Marketer, knowing mainly just however much money you do(n't) have on-hand doesn't cut it. Also, often the size of a given budget isn't nearly as important as the budget definition criteria, when entering into the online space and/or a given channel within. When allocations aren't made properly it can place success out of reach, and lead to a self-perpetuating cycle of budgets never becoming sizable absent foundations of success being found. Everything starts somewhere so it's about starting smart to avoid over-allocations here yet under-allocations there, not just of cash but of time and effort.
In principle, the thinking is just like how the best Analysts know the difference between analysis and reporting, so they take lead on guiding what metrics are relevant to report on in the first place based on the details of any given engagement. They don't put it on their clients to dictate it, nor do they try to dictate it themselves in a vacuum. Rather, they partner with them to translate the bottom and/or top-line needs into a map of what details actually matter (so their clients can then sleep easy, staying largely out of the details).
As a business decision maker (read: signature authority):
- Are you ever questioning if the right calls are being made about how much to spend on online vs. traditional marketing?
- Are you managing an online marketing budget but not sure how to best allocate it across channels, in part because some channels' ROI (like SEO) is just damn hard to nail down?
- Are you managing just a couple channels in particular (like both paid and organic search) but frequently trying to find the right balance?
If you answered "Yes" to any of these questions, this post is for ye.
The bl.asphemo.us Online Marketing Budget Estimator
The following tool is a quick, high-level business questionnaire. It will dish out no hard dollar numbers whatsoever. Instead, it offers relational estimates based on situational attributes. Beyond a basic law of averages it draws on probabilities as I've tapped from a number of different sources, some of whom you've probably heard of but all of whom I'll leave unnamed, hoping you'll trust me when I say they're reliable and reflective of an actionable sampling pool (i.e. a few recent years' worth in particular). I don't normally do any strictly original research but I do survey surveyors (so to speak), and weight their conclusions based on the scopes of their studies and how much I trust their methods for gathering and interpreting data and the overall quality of the sources themselves. Then I draw my own conclusions and develop normally basic models in suit.
Try the Estimator and compare its suggestions to your experience, needs and challenges, past to present. Naturally it's just one method; this one's a top-line (Revenue) approach whereas another way would most likely work up more from a Profit aims perspective... Anywho, it will take just a few minutes to give it a spin.
Looking forward to feedback!