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How to Plan an Online Marketing Budget in 5 Simple Steps: 2022 Guide

Creating a budget for your online marketing needs is essential to keep you on track with your goals and ensure you don’t overspend, or underspend. An online marketing budget is a marketing plan in terms of cost. It is a document that describes the estimated amount your business plans to spend on online marketing over […]

Creating a budget for your online marketing needs is essential to keep you on track with your goals and ensure you don’t overspend, or underspend. An online marketing budget is a marketing plan in terms of cost. It is a document that describes the estimated amount your business plans to spend on online marketing over a period of time. In this article, we explain how to create a digital marketing budget plan in 5 steps.

Let’s dive in. 

What is a Digital Marketing Budget? 

Whether it’s 1983 or 2022, one important strategy to build a successful company is to market your product or services. But it’s 2022, and the best way to grow your business and reach more people is through online marketing. Meanwhile, like other forms of marketing, digital marketing is rarely free, and we don’t recommend you spend too much or too little on your marketing efforts. How do you ensure you spend just enough money on the most important marketing channels that will yield great returns for your business? Easy! By creating an online digital marketing budget plan. 

An online marketing budget describes the estimated amount of money you plan on spending on promoting your goods and services for a period of time. A well-prepared budget lets you know your projected marketing expenses as well as what your marketing goal and strategy should be. You can create a marketing budget annually, quarterly, monthly, or periodically based on your business needs.

 

Digital marketing budget plan concept: Image shows a hand, stationeries, papers, and desktop on a brown table

How To Plan a Digital Marketing Budget 

Your marketing strategy will affect every area of your business, and having a well-detailed plan serves as a roadmap to keep you on track with your marketing costs. Creating an online marketing budget makes it easy to set your marketing on the right course and reach your business marketing goals. Once you allocate costs to the marketing channels you want to focus on, it becomes easy to keep track of your marketing efforts. 

Planning your online marketing budget ensures your budget is based on research and informed decisions. Here are some 5 steps you should take to set up your marketing budget:

STEP 1: Understand Your Audience

Knowing your audience makes it easy to identify the right strategies and platforms to reach them. What are your company’s buyer personas? Where do most of your customers come from? What’s their income level? Where do they hear about your brand? What are their online habits and preferences? 

Understanding your audience will help you see the right marketing strategy to turn your potential customers into actual customers. Also, understanding your audience enables you to get insight into their behavior and other information that makes it possible to make a marketing plan based on their behavior. 

For instance, let’s say you own a skincare brand and your customers are majorly young women between 19-35 who use Instagram often. With this data, it is easy to make an informed decision regarding marketing plans. For example, if you want to increase the customer base for this brand, investing in Instagram marketing is a great idea.

STEP 2: Know Your Costs

As a business owner, the last thing you want to do when it comes to online marketing is to overspend. If you’re going to create an online marketing budget, first, you need to know how much you can spend or should spend. Start by identifying your external and operational costs, including employee payrolls if you have staff, costs of creating products, utility costs, travel costs,  and so on. 

Let’s say it costs N5000 to produce your product, and you sell it for N9000. It won’t be a good idea to spend N7000 promoting a single product because it means you won’t get any profit. This is why knowing your costs is important because it lets you know how much you can afford to spend on marketing and how much you should spend without losing all the profit on  the product.

STEP 3: Outline Your Marketing Goals

Whether you are creating a marketing budget for the first time or for the 7th time,  an essential step to creating a marketing budget is to determine your 2022 marketing goals. Listing out your business goals will help you understand why you need a marketing strategy. What is your vision for your business? What do you want to achieve, and what steps can you take towards reaching this goal? These are questions you can ask to identify your marketing goals. 

Meanwhile, you should ensure your goals are SMART: specific, measurable, attainable, realistic, and time-bound. You don’t want a goal that just says ‘increase website subscribers’ because that doesn’t really tell us anything. Instead, your goal should look like, ‘increase the number of subscribers by 20% before October 2022’.

Now, this is a SMART goal because if you don’t have up to a 20% increase before October, you’d know your marketing strategies could not achieve your goal.

Digital marketing budget concept: Image shoes a Pie chart on a stock chart with a budget

STEP 4: Figure Out The Best Marketing Strategies

The 4th step to planning an online marketing budget is determining the strategies and channels that suit your marketing needs. There are a lot of marketing channels and strategies to promote your business, and you don’t have to spend on all of them. Instead, try to research and identify online marketing strategies that are likely to bring the greatest returns for your business type and marketing goals. For example, if you want to increase the number of return customers, you can invest in great branding. If your goal is to increase the number of website visitors and leads, investing in SEO may be a better strategy. Some popular online marketing strategies include;

  • Influencer Marketing

 

STEP 5: Research Prices and Set Your Budget

Whether you want to hire an influencer to increase brand awareness or invest in social media paid ads, you need to conduct the necessary research. You don’t want to put a random price in your online marketing budget without first researching prices. Once you’ve researched prices, you can then dive into creating an estimated budget for your online marketing needs.

To Sum It Up

Marketing is an important pillar to generate profit in any business. As a business owner in this online marketing time, it’s best to focus most of your marketing efforts and costs on digital marketing. And to spend your money wisely, it’s best to create an online marketing budget. Creating a good digital marketing budget plan involves researching your audience, defining your needs, and following the proper steps. 

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