By analyzing not only the demographics but the psychographics of your target market and strengthening your ideal customer profile, you’ll make the budget you have more effective.
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Last year, according to Statista, 47 percent of small businesses surveyed budgeted less than $10,000 for marketing and advertising. Some 25 of them spent up to $100,000, 11 percent spent up to $500,000, 7 percent spent up to $1 million and 8 spent even more than that.
So, what does this say about setting a marketing budget? It doesn’t say much because companies of varying sizes will have different marketing budgets; and some will spend significantly more than others. However, the budget a company sets doesn’t necessarily determine its success at marketing. In fact, 56 percent of companies polled by Gartner reported adjusting their annual budgets throughout the year.
So, rather than looking at your own budget to gain an idea of the ROI you’ll receive on your marketing and advertising efforts, consider instead how to allocate the budget that you have, for maximum efficiency. Successful companies aren’t necessarily successful because of how much they budget, but rather because of how they spend those funds.
Instead of pooling all of their budget into one advertising medium or another, successful companies strategically allocate what they have into different areas to make the most of the resources they have available.
Whether your company is just starting out or has been in business a while, and whether your budget is large or frugal, allocating your advertising budget the right way helps you make the most of it and gives you a better ROI. Here are several tips for how to optimize and more effectively allocate the advertising budget you have:
Set specific goals.
Goals are vital if you want to use your advertising budget effectively. When setting them, consider whether you want to improve your branding, boost lead generation or up sales. Although you should be making efforts in each area, one may be more important to you at one time than another; this will help you determine if you should focus more on social engagement and branded searches, newsletter subscriptions or orders.
Once you’ve outlined your goals, you’ll have a better idea of where more of your budget needs to be assigned.
Narrow down your target market.
Focusing in on your target market is extremely important to make the most of the budget that you have. This is especially true if you’re on a tight budget and don’t have the money to be wasting advertising on people who may not be, or aren’t, at all interested in your product or service.
By analyzing not only the demographics but the psychographics of your target market and strengthening your ideal customer profile, you’ll be able to make the budget you have more effective.
Choose which channels you want to use.
Once you know what your goals are and whom it is that you’re targeting, decide which channels will help you best reach them. Can you best connect and speak directly to your audience in magazines? Does your target market respond better to billboards or radio ads? Will it be easier to get conversions through a Facebook ad or AdWords?
Choosing the right channels to advertise on is essential in accomplishing your goals and getting the best ROI.
Make a plan and assign funds to different areas.
Once you know on whom, how and where you’ll be spending your advertising budget, start allocating funds. Your primary goal and focus should receive the majority of the budget, but make sure you reserve some money for other goals and areas, too. Sit down, write out and assign the funds you have to different areas. Once you’ve done that, it’s time to launch your campaigns and start putting your budget to work.
Closely watch and track results.
Once you’ve launched your campaigns, it’s imperative to monitor their progress and keep track of results–both on and offline. You may find that one of the mediums you thought would perform best is costing you the most and yielding the worst results. As you keep track, you’ll get a better idea of what’s working and what’s not.
Make any necessary adjustments.
After you’ve tracked and analyzed the results of the marketing and advertising efforts you’ve made, start making adjustments. You’ll want to put less money into mediums that are yielding lower results; and even places that are giving you a good ROI may need adjusting. For example, you may be getting great results from AdWords, but also paying too much per click, meaning you’ll need to rework your campaigns to get a good ROI for a better price.
Hold regular meetings and draft plans.
It’s important to hold regular meetings, whether monthly, semi-annually, or annually, to determine budgets and make plans to help you be more effective in your marketing and advertising.
As you and your team go over the results of campaigns and your goals for the upcoming months, you’ll gain a better idea of how your advertising budget should be allocated, making things easier and smoother to manage in the future.
No matter what size budget you have available for marketing and advertising, allocating those funds effectively can help you make the most of them and work toward getting the best ROI possible. By setting goals, narrowing down your target market, tracking results and making adjustments as you go, you will be able to make even the smallest budget work more effectively for you.
Where are you planning to focus your advertising funds?