Technology is advancing day by day so are the digital marketing metrics. Most of our clients ask us this question “how much should I spend on my digital marketing?”. This post answers to all such questions regarding digital marketing budget and focusses on simplifying the process. So if you are here with that question, we are here with an answer.
For digital marketing, there is no size that fits all, it varies from business to business. Traditional marketing has its own charms but it is limited. Digital marketing allows you to go precisely where the customers go and give you the potential to reach a global audience. So carefully crafting your yearly budget and more marketing investment drives more business growth.
Marketing budget, how much is enough?
What marketed better is what sells better, even the best-rated services don’t sell themselves on their own, so a good digital marketing plan is a must to boost sales and revenues. So while you are allocating a budget for digital marketing make sure it is effective for your resources and your overall marketing plan.
You need to spend more 12 to 20% of your gross revenue on digital marketing if you have just started until your company gets established and has loyal customers (your budget will become half). THIS IS A SOMEWHAT SKEWED IDEA THAT EVERYBODY KNOWS…
Digital Marketing metrics tools:
So when you divvy u your digital marketing budget, you need to have a closer look at these analysis tools to decide yourself what’s the best for your business (digital marketing is not free at all).
Digital marketing is a science, not a superstition that doesn’t need measurements to track the overall process of success. So there are few metrics that offer the most value and insight to devise your digital marketing budget strategy because what gets measured, gets done right?
- Cost per Click (CPC): It is the most critical metric for your digital marketing campaign. It works with Google Adsense and it is the amount your company pays when someone clicks your ad on someone’s website that is recognized by google. For many businesses, it is 1$ to 2$ per click. To guage out an ideally accurate CPC, you need to monitor it over time by looking at the keyword data and figure out what rate worked best for you in terms of cost and profit.
- Cost per acquisition (CPA): CPA is not only about clicks, but it’s also about how many people who attracted to your ad and had chosen to buy your services. When you chose the Cost per action on any advertising platform you only pay when you get your desired acquisitions. This payment model is the best to measure your conversions but sometimes charges more than CPC. Optimizing your bids can optimize CPA and works just like CPC. Instead of chasing clicks chase conversions and properly analyzing your CPA prior to starting a digital campaign will save you a lot of time and money.
- Click-through rate (CTR): It is the percentage ratio of people who saw your ad (impressions) vs those who clicked your ad. CTR below 2% means you need improvements in your ad creative prior to investing. They are the best way to identify the effectiveness of a previous ad campaign and carefully scheming your next digital marketing plan. Low CTRs also reduce Google Ads visibility.
- Return on Investment (ROI): ROI is the total return in terms of profit you have earned from your digital marketing campaign. It is simply the ratio of money spent vs money earned. Negative ROI means you are at a loss and there is something you are doing wrong in your overall campaign and its time for fixing before starting a new campaign.
- Key Performance Indicator (KPI): Digital marketing solely relies on KPIs as these indicate your overall progress in terms of numbers whether in social media campaigns, SEO or AdSense campaigns. With KPI you set and target and then it provides you results based on your achievements to reach that target. With KPIs you can see a bigger picture and get a chance to modify your strategies.A right KPI is very important to set a positive ROI.
Having a smart analysis of these metrics will give you an idea how much you need to invest and what strategies you need to incorporate in future. Your goal is not to run ads only you want leads as well.
Improve your digital marketing budget planning and ad campaign, and evaluate your online success with Cruzemedia. We make sure you get the return you deserve from every dollar you spend.