How much to spend on marketing and advertising is a question all businesses ask at one point or another. How much should you spend, and how much can you truly afford to spend? This is an important question that should be answered and not ignored with hopes that it will go away.
So, in hopes that business owners will take this question seriously, I am here today to talk a little about the most popular ways to figure out how much to spend on marketing.
The Traditional Way
The most traditional way to approach this question is to spend a percentage of your revenue. You can approach this method by looking at what you plan to make in sales this year and then multiply that by a percentage to reach your business’ marketing budget for the upcoming year. On average, business who take this approach allocates anywhere from 8 -12% of their revenue.
So for example, say you estimate your business will bring in $1,000,000 in revenue, and you want to dedicate 8% of your revenue to marketing and advertising. So you would multiply $1,000,000 x 8%, which would give you a budget of $80,000 for the year.
Other things to take into account when determining the percentage of revenue that you should dedicate to marketing and advertising are:
- Your business’ industry
- Competitive landscape
- Competitor’s spend
- Market saturation
- Target audience
This method works because it is an easy and understandable answer, but be careful because it’s not 100% accurate. Small or new businesses need to be especially careful because if you don’t have much revenue, the whole equation can breakdown. Also when calculating this out keep your margins in mind!
Everything You Can Afford
So, we know that often times it’s hard to calculate future sales, especially on the local/small business side. So this is definitely one of the most popular methods for local and small business. Essentially the idea is to set money aside that is necessary to run the business and then invest the rest into marketing to build popularity and awareness.
The overall objective of this method is to help grow your business quickly, and establish yourself in the marketplace. The upside of this method in theory is that it allows for growing your business fast. This aggressive, and risky, method should be well thought out and planned because you are essentially putting all your eggs in one basket.
Just A Bit More Then the Competition
This method is pretty straight forward, find out what the competition is spending than spend just a tad bit more then them.
This method offers a reasonably good way to estimates how much you should be spending in the marketplace (especially if you are new to marketing and advertising). The biggest issue with this method is that it is often hard to find out exactly how much your competitors are spending, so your numbers are not always as accurate as you might like.
Desired Customer Growth
This is a great method if you have a specific number of new customers you want to attract. Essentially the equation for this type of budget planning is: the cost of a new customer multiplied by the amount of new customers you want to acquire, gives you the total amount you need to spend.
This is a great and very accurate way to forecast the amount you will need to spend to reach your objective. Keep in mind though that in order for this method to be successful you need to know exactly how much it cost to acquire a new customer.
Industry Specific
Every industry has projections of how much a business will need to spend to be successful. Seek out these averages and refine them to your market, business and situation.
This method is great because it is very accurate and specific to your type of business. Just be careful because often times this average can include amounts from larger organizations, so it can be overestimated for a small business.
Spend Nothing and Try to Market for Free
Thanks to digital media this is now a doable method. Build your social media networks, or increase your customer database. All these are simple methods that can really help boost your sales.
But remember because it is free, you will more then likely end up spending a lot of time managing all these methods- so in essence it isn’t free.
Objective/Task Oriented
This might be one of the best methods for local and small businesses that are running on very limited resources. This method is more general and revolves around setting objectives, planning tasks required to complete the objectives and then estimating all the costs for the task required.
Overall this method works best if you have very specific objectives and tasks that you want to accomplish. The only set back is that you need to have a solid understanding of what is important and what you need to accomplish.
Overall, trying to project a marketing budget can be very difficult to plan out, especially if you are a small business. What local and small business owners need to keep in mind is that going through the process and making a budget gives you a starting point. From there, you can begin to make decisions about the rest of your marketing strategies and how to move forward.
It seems like social media is EVERYWHERE now. Everyone is using it now, consumers and businesses of all sizes alike. But as a business have you ever stopped to think which social media network is actually working for your business?
The process of using social media can be very time consuming, so you want to make sure you are using the best social network to achieve your goals and objectives. But do you know which social network will help you achieve your goals?
Today I want to offer you some quick insights into the top five social networks, Facebook, Google+, Twitter, Pinterest, LinkedIn and YouTube. We will be looking at four main factors, customer communication, brand exposure, traffic to your site and SEO value.
Facebook
Everyone is on Facebook, right? Here’s how Facebook can help out your business.
Customer Communication
Facebook offers you an easy and efficient way to talk to your entire demographic. You can create and push content and help manage your business reputation to your current fans. The only downside is if you want to reach non-fans, or 100% of your fan base, you will have to run sponsored posts, which means having to pay for advertising and knowing how to effectively build a successful ad campaign.
Brand Exposure
Because of their huge user base, Facebook is one of the quickest and most cost effective ways to get brand exposure.
Traffic To Your Site
Thanks to that huge user base we talked about earlier, one new fan can lead to 20 new website visitors. These visitors are leads, or potential customers for your business!
SEO Value
As of right now, only shared links from fan pages matter for search engine optimization, but as things progress it is likely that in the future social media network sites like Facebook will play a bigger role in search engine ranking.
Google+
As the #2 social media network, Google+ has become a quiet contender among social media networks.
Customer Communication
As a the second place social media network, Google+ still lacks the reach of Facebook and Twitter. But even though it doesn’t have the same reach, it does facilitate communication with customers.
Brand Exposure
As Google’s social network, Google+ offers excellent brand exposure. Your account will appear in branded search results, which will add credibility and increased exposure.
Traffic To Your Site
Google+ helps to provide your site with new traffic, plus users tend to stay on the site whose links they follow.
SEO Value
Because the Google +1 button allows for users to search both public and private information, this gives Google+ a advantage at providing value for search engine optimization and search engine ranking.
Twitter
Twitter offers businesses a great way to keep your customers informed about your business’ latest news. It’s large user base and real-time element makes it one of the best social media networks a business can use.
Customer Communication
Twitter is one of the best channels for direct communication with your customers. It allows you to have real-time conversations with your customers.
Brand Exposure
Twitter offers an easy, widely used and cost-effective way to gain brand exposure.
Traffic To Your Site
Inserting links and call to actions into your tweets gives Twitter an
unmatched ability to drive traffic directly to your site.
SEO Value
The search engine optimization value on Twitter beneficial for businesses due to the fact that Google gives authority ranks for Twitter profiles.
Pinterest
As one newest social media networks, Pinterest has already established a huge following among women, showing that a picture truly is worth a thousand words.
Customer Communication
Aside from the ability to showcase your new product, Pinerest does not offer the opportunity for business to directly communicate with customers.
Brand Exposure
As visual content continues to grow and dominate social media, this makes Pinterest one of the most powerful tools for brand exposure. Visual content, such as images and video are viewed 70% more then written content. So if your business is visual, Pinterest is the place to be.
Traffic To Your Site
Most pinned images contain links back to a site, which tremendously helps drive traffic to your site. It is currently one of the top three traffic referral sites.
SEO Value
Although Pinterest’s Pins do not allow for links to be tracked by search engines, it can seriously increase your websites traffic and increase your brand awareness. In addition, as mentioned before things constantly get updated and revised so I would not be surprised if Pinterest becomes a huge asset to business search engine optimization in the future.
LinkedIn
One of the best social media networks for B2B brands. LinkedIn offers you a platform to connect and engage with industry professionals.
Customer Communication
LinkedIn offers an opportunity to connect with your customers through groups with specific interests connected to your brand.
Brand Exposure
Because LinkedIn is a professional networking site, it provides impressive exposure to the business world. This allows you to promote your personal and business brand to a variety of professional contacts and organizations.
Traffic To Your Site
One of the biggest drawbacks of using LinkedIn is that it is not a huge referral site. Though you can get a lot of connections, not a lot of them will end up at your site, because of this it is extremely important to properly manage and dedicated resources to increase traffic to your site.
SEO Value
LinkedIn’s profiles are some of the easiest and most frequently SEO-ranked social profiles on the web. So having your business on LinkedIn can help you end up on search engine result pages and strongly benefit your business’ search engine optimization.
YouTube
YouTube is now ranked as the #3 social media network. As visual content continues to grow, YouTube has become the place consumers go to get their video fix.
Customer Communication
Video has become a great way to get your customers involved. It provides unique ways to engage, entertain, and inform your customer. YouTube offers the prefect platform to do all these things.
Brand Exposure
YouTube offers a great way to promote your brand. As a visual medium it offers a great way to continuously keep your customer engaged with your brand and to share your content.
Traffic To Your Site
YouTube offers a great opportunity to drive traffic to your site. Entertain your customer or potential customer with a great video and
they will more than likely want to discover more about who you are as a brand.
SEO Value
Consistently using YouTube can seriously help bump up your search engine optimization. Just remember to integrate keywords, sitemaps, titles and robot text files to help judge relevance.
As you can see, your options for social media networks are diverse, and we only covered the most popular social media networks! When deciding which networks to use always keep in mind what your objectives are and what you hope to accomplish.
Lastly, don’t forget that in order to run successful social media campaigns you must be willing dedicate sufficient time and resources to ensure they are properly managed and maintained.
The Rio Grande Valley, as mentioned before in a previous blog post, is a unique place to be for a business. We adopt trends and innovation at our own rate, despite what is going on in the outside world. So, as someone in the marketing and advertising industry it does not surprise me that local businesses have been slow to adapt digital marketing into their marketing budget and practices.
The thing about digital marketing is that it can be a very cost effective way for local businesses to spread the word about their products and services, if done right. The downside to digital marketing is that everyone that owns a computer thinks they can do it the ‘right way’, when in reality there is a lot more science to it than meets the eye. The online world is rapidly changing and in order to stay ahead of the curve and in contact with your potential customers you need to be aware of the new marketing techniques. Because of this, we want to share some fundamental marketing techniques that local businesses should strive to do right in 2013.
Let’s get things right in 2013:
Email Lists
This can be a huge asset to your business, it’s essentially a direct line to your customers! These people have already frequented your business and have decided they like you enough to want to hear from you.
So how do you do it? Gather emails from people who actually want to be on your list, because in the long run these are the people that want to hear from you and will go back in store to buy from you.
Don’t expect fast results, but if you are consistently sending out useful messages, when the need arises they will think of you first.
Website
Did you know that most 40% of consumers will leave your website within 3 seconds if your content doesn’t load?
People don’t like to wait for information, they will simply click straight off and go to another company’s website (more than likely your competitors website). So what can you do? Simply remove anything that is extraneous to load and leave only the useful stuff.
Think about what you are looking for when looking for information. What kind of information do you like to see on a website? How long do you wait for a site to load? Make sure your website is not only consumer friendly, but mobile friendly. Does it load on a mobile device? Does it require the user to pinch and zoom? If so, you should look at converting your website.
Search Engine Optimization
97% customers will search online for a product they want to buy locally. What does that mean? You NEED to be easy to find! For SEO you need to focus on producing quality content that, others will want to link to and share. Social media plays a big part in SEO, are you taking advantage of both in the correct way?
Blogging
Remember that quality content we talked about earlier, blogging is a prefect way to share unique, high quality information. Not only that, but this is one of best ways to communicate with your customers on a regular basis. Blogging allows you to communicate with your customers and build a long-term relationship with your audience. In addition, your blog can help you draw people in and prompt them to sign up for your email list and increase your SEO!
Social Media
How can you be digital without social media? Social media is a very unique marketing tool, with many unique uses. But it’s important for local businesses to use this as a platform to form relationships with their followers. Here is where you can differentiate yourself from the competition.
See something you think your audience will like? Share it! Make your social media outlets an important part of your audiences life by providing expert advice.
Search Engine Marketing
Approximately 1 in every 5 online searches has a local intent. Will your future customer be able to find your businesses online? Search engine marketing can help increase your visibility when consumers search online, and help drive traffic to your business’ website.
Apps
Mobile apps are a great way to engage with users. They offer you the ability to push notifications, coupons, and constantly be on their screen and hopefully top of mind.
In this day and age, digital marketing is becoming a must do for local businesses. These techniques offer a great way to reach your customers in a way they won’t feel like they are being ‘marketed’ to.
So, here’s to a successful 2013!
Here at Amplify we pride ourselves in our ability to provide cutting edge digital marketing services to our local clients. If you ever feel like you would like to get your business ahead of the game, and into the digital sphere we are here to help!
