Figuring out how big your marketing and advertising budget should be can be tricky with no right answers.
In broad figures, in the United States, brands spend between 5-12% of their revenue on marketing and advertising. Of course, this varies greatly depending on the niche, type of customer, and product sold. B2B and B2C firms also vary.
So how much should your business spend on marketing ?
Unfortunately, There’s no one fits all answer.
Think through who your customers are then what are the ways you can get in front of them. Consider also your margin and other larger projects such as needing a new online store, new product release marketing, etc. A basic marketing plan doesn’t have to be complicated and often a simple outline of who your customers are, where to reach them – which defines marketing channels, then thinking through margin on each item can be the backbone of a more in-depth marketing plan.
It’s easy to overcomplicate your analysis on budget, but more many firms, a more simple approach actually yields better results.
Who are you customers?
Properly segmenting your customers is one of the absolute most important marketing tasks you can spend time on. Understanding their price range, why they choose you over competitors, and if B2B, their position within the company, the foundation for thinking through a strong marketing plan.
Once you know who your customers are and why they buy, you can expand that thinking to finding and building leads of prospective customers while tailoring your marketing content and channels to effectively reach them.
Knowing why they buy is a great way to draft ads and come up with content that potential customers will engage with.
Accurately calculating your customer acquisition cost and customer lifetime value is also an important tool in determining a valid marketing budget.
How to Reach your potential customers?
Now that you understand who your customers are and why they buy from you, what are the ways that you can reach new potential customers that are similar to the customers you buy from?
This heavily depends on B2B vs B2C, but it could be anything from a mix of social media channels, youtube, sponsorships, influencer marketing, trade shows, tv ads, etc. This 100% depends on your industry and niche. But, the key point is to make a list of all the marketing channels that could work to get your brand in front of potential customers.
It’s all about data
Data is critical to running a successful small business marketing plan. Being able to accurately measure how many clicks are made, how many emails opens you get for a campaign, the number of video views, website signs ups and ultimately buys, is crucial to see what your audience responds to, and where to add vs were to remove budget.
It’s no secret more firms than ever are spending vast sums of money to collect and analyze data, and on a much smaller level, any business needs to be able to accurately to track its marketing campaigns in order to improve it and determine how successful it is.
A fundamental component of any successful marketing campaign is A/B testing in several channels. Test which type of content generates the best results, over time this tweaking will continually make your marketing campaigns more efficient and thus more profitable.
Being able to track customer acquisition cost also is important to maintaining a marketing plan that is profitable.
Digital
Digital marketing represents anything that’s online, whether PPC on google, email, youtube content, SEO, Instagram, the list is nearly endless, but regardless an overwhelming number of consumers are engaged much more deeply through digital channels than they are with traditional print outlets such as radio or magazine print ads. Now that’s not to say that traditional marketing channels aren’t effective, because they without a doubt are, but it’s important to realize that you are missing out on a huge number of prospective customers if you don’t have an active digital marketing campaign.
You don’t need to actively engage on every social media platform but find 2-3 that works for your niche and brand, and actively post on them. Often, paid Facebook, youtube and even TikTok ads yield great results once campaigns are set up and optimized.
How to improve marketing ROI?
It’s critical to see what marketing channels work best with your audience and products. Every firm has more success with some channels than others. That’s fine, it’s just important to find 2-4 that work for you, and experiment with scaling up your marketing spend and volume of marketing in those channels.
Continue to experiment and A/B across other channels, because often you’ll find that unexpected marketing channels yield much stronger results than you would think. Without constant experimentation, you wouldn’t find those new or less obvious channels.
Marketing Data Collection and Analysis
Keep data across every channel, over time you’ll get a feel for how efficient a campaign is and the most profitable marketing channels for your business.
Modern marketing software systems are easy to use and don’t cost much relative to the value they bring in the form of marketing automation, insights and clarity into your marketing results.
Make sure to review marketing data monthly, if not more often. Digital campaigns are often tweaked weekly until the campaign is operating smoothly.
Video Marketing Channels
Video has become a hot form of marketing content used in a variety of channels, and it’s easy to see why. Would you rather read paragraphs and look at diagrams to learn how a new SaaS product works, or would you rather watch a 2-minute video? – The answer is obvious and is backed up by hundreds of studies from a variety of firms including Google, Facebook, and many others.
Video is a much more engaging form of marketing, that keeps users thinking about the content and looking at it much longer than traditional ads. It’s for this reason that marketing campaigns running video ads instead of static ads generate much higher results. Between 50-250% greater which is astounding. Video does take a larger budget to create the content, but often one video can be repurposed into a large number of ways and even used for a long period of time. Once you have the content, engagement, clicks, open rates, and signups will rise, which effectively boosts the overall profitability of your marketing campaign. This is why nearly every tech startup and thousands of brands big and small are quickly working to integrate video content into their marketing channels.
Going forward, video will be even more important as video ads will start to become the standard. So stay ahead of your competitors and start integrating video ads into your marketing channels sooner rather than later.
Ultimately if you can keep marketing spend profitable, increasing spend in those channels will only increase your sales up to a certain point.
Want help with your marketing plan or video marketing in 2021?
Volan Media is a top Knoxville B2B video production company, having worked with dozens of small and large brands to help them craft B2B content marketing strategies and build content that is engaging and generates results. Let’s talk about how we can energize your brand and sales growth with fresh video content. Get in Touch
