According to numerous budgeting gurus (or some sort of budgeting higher power) a monthly budget should look a little something like this:
- Housing: 30%
- Utilities and other household expenses: 10%
- Food: 15%
- Entertainment: 5%
- Everything else: 40%
However, my monthly budget actually looks more like this*:
- Housing: 30%
- Utilities: 5%
- Food: 10%
- Holidays: 20%
- Mysterious Cash Expenses: 15%
- Savings: 20%
*Fun fact: I am a miser and literally ate gruel for breakfast this morning.
This budget is a little different to the ‘tried-and-true’ version above – and for good reason. Simply put, everyone’s needs are unique. I throw money at holidays like there’s no tomorrow, but will bulk purchase dried beans to save money on lunches. Everybody has their own version of the prescribed budget they adhere to.
The point is that there is no ‘one-size-fits-all’ budget, be it personal or professional. What works for one individual or company may not work for another. It’s all about finding out what works for you.
Finding your fit
Traditional marketers would have you look at your ROI by channel and then divide your budget accordingly. Channels that bring in customers are the ones that get the cash. However, this strategy disregards the reality of multi-channel acquisition, multiple touch points, and the buyer’s journey. In actuality, it’s important to cover all your bases and make sure you are allocating a certain amount of your budget to every avenue. An easy way to view your customer touchpoints is through tools like Google Analytics. If you’ve set up goals and have tagged your campaign links correctly, Attribution modelling can shed a ton of light on what channels are being interacted with before a conversion happens.
An inbound marketing approach is customer centric and gives you the opportunity to personalise your marketing to appeal to your very specific target market. Much like my budget (where I will gladly eat porridge for breakfast everyday in order to spend a few weeks in the sun every year) you should find out where your customer will look for your product/service and prioritise the channels that will reach them. If they are more likely to spend time on social media than on emails – then that is where you should focus more of your budget. Just remember not to cut out budget for emails completely before looking at those attribution reports!
According to the State of Inbound Marketing Report, traditional marketing tends to undervalue aspects such as social media, SEO and blogging. These are the core of many successful inbound marketing strategies and could cost you dearly if not included in the budget.
Planning for the future
The thing is, not all results can be measured immediately, and some of the quick-fix solutions that give you a great ROI this year could fail you next time around.
An inbound methodology focuses on long-term targets. Those that might not have immediate dividends but that will show solid and fruitful results in the long run. Set your eyes on the future and commit to spending money on avenues that promise long-term success.
According to Forrester, the following trends for digital marketing budgets from 2015 to 2019 are worth keeping an eye on:
- Search engine marketing is one of the most successful marketing avenues and will continue to take up most of the marketing budget.
- Digital display, which includes online videos, banners and other content, will take up the next slot in the budget.
- Social media is increasing every year and, while only taking 15% of the total spend now, is set to expand exponentially.
- Mobile marketing won’t be tracked much individually, as it will likely be integrated into every channel.
And yet I STILL hear people moaning about how useless display advertising is! Don’t fall into the trap of allocating your entire marketing budget to the channel users hit immediately before converting. We are well beyond this type of simple conversion attribution. Take a hint from the exponential rise of strategies like inbound marketing and allocate your budget to channels your customers are using, regardless of where that is in the buyer’s journey.
Other businesses are already seeing huge benefits from their efforts with inbound marketing and similar strategies. To benchmark your own marketing strategy, have a look at our 7 powerful inbound marketing charts or subscribe our blog for more great marketing budget tips.