Digital marketing, today, is necessary for businesses to improve their reach. From ad spend to posting on social media or starting a blog, the growth in digital marketing spends had been consistent in the last decade. It promised a 13% increase in 2021.
Online ad spend in 2019 marked a record high of 4.2 million Australian dollars on search and directory advertising, as well as 1.67 million Australian dollars on classifieds. Interestingly, the post-pandemic allocation of marketing budgets shows a clear increase in investment across the various online or digital channels. In 2021, the share of programmatic digital ad spending was 70% in the country.
Why digital marketing is gaining?
The last year made businesses more aware to the importance of customer experience. Brand recognition and good content has become a key to attract and retain customers.
Increased online presence of target audiences across industries has been a major driving force behind the growth of digital marketing spends. A business that is not investing in digital marketing stands to lose out to competitors. If a brand is not budgeting for online advertising, they are missing a huge opportunity for visibility to prospects and customers.
How much should digital spending be?
The fact remains that every business is different and so will their approach to digital marketing spend differ. For instance, an ecommerce business will invest a greater percentage of their marketing budget towards digital. There are many ways to approach this based on the answer to some key questions:
- Do you want to accelerate the growth of your business?
- What is the ratio of your current marketing methods viz. traditional and online?
- What are your strategic goals viz. brand recognition, customer retention, or new prospects?
- What is the difficulty level or area of your target market?
- What is the age of the business and competition level?
The answers will influence the final marketing figure.
- Commit to investing a certain percentage of revenue back into marketing. As a general rule, less than 7% of total revenue will typically not yield growth while above 15% will.
- Align the budget to marketing goals. Calculate the leads needed to reach sales that in turn will achieve the target revenue. The final figure can be reached through industry-specific conversion rates.
- Adjust the variable of budget depending on business objectives and taking into account the competitor’s strategy. A business has to match the spend of all the competition in order to overtake them.
- Identify avenues to increase or decrease spending by outlining the sales funnel. This would help to map costs to each phase and technique.
A business should approach marketing needs strategically and find the most cost-effective way to implement the most efficient changes. Digital marketing expenditure also brings in a lot of learning that is invaluable.
Digital marketing strategies to stress on
Marketing budget should go toward activities that help you to reach your goals. Different types of digital marketing activities help with different goals.
For instance, to outrank competitors for certain keyword phrases and rank within the top three search results, focus on better SEO services. Appearing at the top instantly should allocate more marketing spend towards paid ads. On the other hand, leveraging massive social media audience and brand recognition means for spending on Social Media Marketing.
However, bigger budgets don’t obviously mean better results. The best SEO services optimise every cent with diligent homework. Identifying the target market and crafting messages that appeal. Be wise about how digital marketing dollars are spent, and drive more search traffic to your website.
Digital marketing spend is worth every cent because experienced firms can guarantee a robust ROI.