How to plan a digital communication budget for my business?

Plenty of our clients, friends, and network connections have been asking us the same questions. How much money should I spend on Facebook Ads? How can I gauge a budget for my business? Is there any formula for getting to this number? How much should I boost my Instagram post to get as many likes as Kim Kardashian?

These are all great questions, but as it turns out, they’re all pretty difficult to answer* since they all really depend on several factors. Here’s a quick overview of what you need to consider, without getting too deep into the rabbit hole.

• Product/service offered
• Industry
• Target audience (this helps to determine which marketing channels you’ll need to use)

Once you defined these elements, your marketing agency or team should be able to make qualified recommendations on which channels are known to have the highest ROI for your industry, product/service, and target audience. Some of these digital channels include:

• Email marketing
• Google Ads (Merchant, Display, Search)
• Bing/Yahoo
• Amazon (but only for products that are sold on Amazon, so this might not apply to you)
• Paid digital advertising (Facebook, Instagram, Pinterest, LinkedIn, Twitter, YouTube video ads)
• Social media management (regularly posting stories on both Facebook and Instagram, curating your feed and interacting with the audience, and creating content)
• SEO — which is a whole category in itself and not to be ignored — along with blogging
• Affiliate marketing, influencer marketing, networking
• And plenty of others …

Then you still have to consider traditional channels like radio, print, local TV, and even PR, which are still relevant and pretty efficient depending on specific situations.

So there are clearly a lot of decisions that go into creating a marketing budget for your business. Picking the right agency that also provides strategic direction and consulting versus a team of implementers is key to long-term success as well. Decision-makers need to understand and aim for long-term goals and not just ephemeral numbers such as likes, comments, reach. Successful brands aren’t built on likes or follows but solid marketing and communication plans.

When planning your digital marketing plan, something you can’t overlook is your website. Your website is like your online store, open 24/7, in multiple locations at once. If your website is not conversion efficient, well-designed, and with interesting content, people may get there — thanks to your communication efforts — but they’ll bounce instantly because you aren’t offering what they’re looking for. Assuming your website is properly optimized for conversion, the quickest route to revenue is through paid advertising, generally speaking. If done right, you’ll start to see an instant return and will potentially create the revenue needed to start diving into a more comprehensive marketing plan with supporting email marketing flows, SEO, landing page creation, etc.

Unfortunately, there is no magic formula that you can use to come up with a specific number, no matter what some blogs and specialists might tell you.

Some of our clients spend over $50k a month in paid advertising alone, while some others have a total monthly marketing budget of $10k. However, keep in mind that the amount of money you put in shouldn’t discourage you — it’s important to start somewhere and the budget you set now in no way represents the budget you’ll have in a year or even 3 months from now.

When planning a communication budget, seasonality also plays a large role, as some client budgets grow over summer based on demand. So be smart about not only where but also when you are spending your money.

In general, the U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing and advertising if you’re making less than $5 million a year. This is a good starting point, but remember that nothing is clean cut when it comes to growing your business.

Every business and industry faces different challenges and it’s important to look at your marketing efforts as an investment rather than a cost. No matter how much money you put in, you still have to be able to measure the results. And in order to measure them, you’ll have to set goals. Whether you’re looking to increase sales, market share, brand awareness, or reach, you need your goals to be clear. You won’t be able to know how you’re doing if you don’t know where you’re going. At Sofia Digital Agency, we use the S.M.A.R.T. Goals Criteria.

Nowadays, technology delivers an array of possibilities of how you can use your money in an efficient way, as well as the right data to measure, analyze, and understand your marketing efforts. But at the end of the day, what always separate top brands from the rest of the crowd has been creativity. It doesn’t matter the channel, the goals you set, or your budget, if you don’t apply creativity to your business, your brand will go unnoticed. Remember, we’re talking about advertising, and people today have created a self-defense system to ignore most of the 700 ads we are exposed each day. Advertising interrupts people’s lives, and the only way to get noticed is to create interesting and relevant content. Whether it’s a blog post, an Instagram post, or a TV commercial, you should always aim to create valuable content that appeals to your audience.

There’s no secret to planning a successful communication budget for your business. There is no magic formula. As long as your focus is put on creating relevant, interesting content, you’ll be using your budget in the most efficient way possible.

As I said, this is just the tip of the iceberg, the surface of the rabbit hole. We’re not trying to come up with a solution to your problem, but rather, we are here to point you in the right direction. If you have any other questions for us or would like to chat more about your particular marketing needs, comment below or hit me up with an email at justo@sofiadigital.agency.

*We have an answer for the Kim Kardashian question, actually, and it is a lot.