• How to Distribute Your Small Business Marketing Budget

Today, small businesses have more digital options than ever to choose from for effective marketing. Expanding choice, however, has also increased complexity. Small business owners now have to distinguish between organic and paid search, blogging and content marketing, social media and social messaging etc., determine the channel/platform best suited for their business priorities and then decide how much of their budget to commit to each.

Here, then, is a simple yet actionable guide to creating a multichannel campaign that is focused on your business priorities, flexible, and measurable.

Tips for Distributing Your Small Business Marketing Budget

4 Steps to Successfully Allocating Your Marketing Budget

Identify Core Objectives

Growth is generally the primary objective of most marketing campaigns — growth in sales leads, revenue, market share, loyalty, brand awareness, and more. There are a lot of variables—like the lifecycle stage of your product or the typical sales cycle in your business—that can influence the choice of marketing objectives. For instance, conversion would trump brand awareness for a low-value impulse product, while high-value high-involvement categories may require quite the opposite approach.

Whatever your specific business circumstances, every well-defined marketing objective has to follow the principles described by the common business acronym SMART. As per these, your marketing objectives must:

  • Have a Specific purpose (grow revenue)
  • Have a Measurable outcome (by 25 percent)
  • Be Achievable
  • Be Realistic
  • Be Time-bound (in 6 months)

The realistic and achievable aspects point back to the need to set objectives that are reasonable, relevant and practical within the context of the skills and resources at your disposal and the operational realities of your industry.

A marketing plan with clearly defined objectives is essential for every small business owner looking to maximize the impact of a limited budget. More importantly though, how you prioritize and define your core objectives can have a knock-on effect on the next stage of the process, namely your choice of marketing platforms.

Pick Your Platforms

Your choice of platform will reflect your marketing priorities. If you have a largely local clientele, then listing your company on Google My Business has to be an absolute priority. This completely free service collates and delivers all your company information, including contact information, click-to-call service, and driving directions, as a local search result.

If lead generation is your priority, then you just cannot ignore the power of search engines, either through organic (SEO) or paid (PPC) search. Organic results are 8.5 times more likely to be clicked while paid results are 1.5X more likely to convert [Source: Moz]. Organic is free and effective in the long term while PPC (pay per click) costs money but delivers in the short term.

The organic vs paid comparison extends to social media marketing too, though organic reach across social platforms—especially on Facebook—seems to be declining. Organic social media posting can help  foster engagement, increase brand awareness, and build community around your brand, while paid social media ads are geared toward driving targeted traffic and generating sales.

Specifics aside, it is best for small businesses to start by focusing on one or a select few social platforms where their target customers are most active. If your marketing objectives pay off, then add more channels and expand your messaging. If they don’t, tweak your platform and your messaging strategy and try again.

Invest in Innovation

Over 96 percent of businesses use Facebook while 62 percent of SMBs feel their paid Facebook Ads are failing (Source: Neil Patel) . This sums up the situation across many popular marketing platforms: declining organic reach, rising advertising prices, and commercial saturation. So, small businesses constantly need to be on the lookout for emergent and growth platforms to experiment and innovate with.

Take Instagram, for instance. The site recently reached a billion users, delivers a young demographic, has the most audience engagement among social media platforms, offers excellent targeting capabilities with the help of hashtags, and is quickly becoming the highest priority for small businesses. This combination offers the opportunity to focus their marketing efforts by conducting competitive research, using custom audiences and running geo-targeted campaigns.

Or consider social messaging apps, the top four of which now have more users than the top four social media apps. Yet, only 20 percent of marketers have used these apps for marketing. A Nielsen survey found that a majority of messaging app users were more likely to shop with a business that they could message directly. SMBs need to innovate on these emerging platforms before they get fully commercialized in order to maximize their marketing ROI [Source: Campaign Us).

Use ROI and Reallocate Every Quarter

According to a study of digital marketing ROI among SMBs, a majority(45%) do not measure ROI and less than 12 percent are “extremely satisfied” (Source: Digital Examiner). And yet study after study shows that small and medium businesses expect to increase digital spends this year. There is very little value in any digital campaign that is not correlated back to its core objectives.

Measuring the effectiveness of campaigns against objectives enables marketers to reallocate budgets across platforms and objectives. Most major social media platforms offer free analytics tools and dashboards to test and optimize strategies and to measure campaign effectiveness. In addition, there are several third party solutions that offer centralized monitoring and management across multiple social channels.

An analytical approach to ROI allows you to fine-tune your small business marketing plan based on campaign effectiveness, cost efficiency, and evolving business objectives. For example, if you are satisfied with conversion but not with lead generation, then you could reallocate accordingly. Similarly, you can also shift spending to a new channel if you determine that it can deliver more value than an existing medium in your marketing mix.

Focus on ROI

An ROI-driven approach to digital spending is critical to small businesses on two counts. First, it allows you to focus on maximizing the impact of your relatively limited budgets. Second, it gives you room to scale up spending and innovation as each campaign cycle delivers the objectives it was meant to. This differentiated, effective and profitable approach to digital marketing has to be rooted in long- and short-term business priorities, as it sets the pace for everything that follows, from establishing ROI to fine-tuning the strategy.

 

Need help setting your marketing goals and objectives? Check out our handy pocket guide below:

 

 

Anand Srinivasan
Anand Srinivasan
Anand Srinivasan is the founder of Hubbion, a suite of free business apps and resources.

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