Have You Asked These Questions On Marketing Strategy and Budget?

For many businesses, coming up with business goals is relatively easy, but the way and the means to get there is somewhat lost in the haze of enthusiasm. Truth be told, if you build it they won't come (if only!), rather, achieving success takes careful planning, strategy, resource allocation and yes, 'cash' . 

We've said it before, marketing is something you know you should do, but is often the last thing a business will allocate a reasonable budget to. Did you know that as a rule of thumb, companies should spend around 5 percent of their total revenue on marketing to maintain their current position, while companies looking to grow or gain greater market share should budget a higher percentage—usually around 10 percent.  Just saying. 

Ok, ok, let's take it back a step, you have this product or service that you want to take to market. The best place to start is with some marketing basics. 

BIG QUESTION 1 : What is my Strategy 

There are some vital strategic questions that we must ask of our business at the outset of any new venture, be it a new product launch, a new business goal or actual business launch. To get the creative juices flowing brainstorm these few ideas... 

What's my business plan? 

The classic 4 P's in the Marketing Mix stand for Product, Price, Place and Promotion - most of us are familiar with these terms as they are the pillars of a business or marketing situation or strategy. 

To simplify it, we could look at it like this:  What do we have or where are we going, what's it going to cost us and them, where can it be found or bought and how will people learn about it and find it. 

Product

Or Service, what is it that we have to offer and who is it intended for. 

Price 

What is this going to cost us? What are the competitors doing? What is the cost of sales? What is the market willing to pay? 

Place 

Where can the product or service be accessed? Online, In-store, through a 3rd party?

Promotion 

How will we generate sales revenue from this product or service? 

BIG QUESTION 2: What are our Resources? 

Skills  

Do we have the manpower and internal competencies to work on this strategic goal? What can be sourced internally and what do we need to outsource? 

What is our Budget? 

BIG QUESTION 3: The Budget 

How do I allocate the Marketing budget? 

Reports from Forrester Research and eMarketer show the estimated allocation of marketing funds offline vs. online and across the digital channels.  

In 2018, the average firm was expected to allocate 41% of their marketing budget to online, and this rate is expected to grow to 45% by 2020.

Search engine marketing will capture the largest share of online spend with online display (banner ads, online video, etc.) taking the second largest share.

Social media advertising investments will continue to grow, with a 17% compound annual growth rate from 2016 to 2021, and is expected to represent 25% of total online spending in 2018.

Mobile marketing has grown to a point that it’s no longer tracked in the forecast and it’s presumed to be considered across all channels.

Digital marketing is pacing at an 11% compound annual growth rate between 2016 and 2021 with the biggest growth occurring in online video.

Investment in paid search, display advertising, social media advertising, online video advertising and email marketing is predicted to account for 46% of all advertising by 2021. 

The key take home here is digital can not be ignored or under estimated and should form at least 50-60% of your marketing budget moving forward. 

There is a great deal to be said about digital marketing into the future, and the common misconception that digital marketing is mostly seated in and reliant on social media. This is entirely false. 

Digital marketing (all marketing efforts online that include search engines, blogs, social media, pay per click advertising) as with various forms of traditional marketing, must be viewed as an eco-system working in unison towards a desired outcome or goal. 

Each business is unique in its needs, resources and customers and requires a careful assessment of its own marketing situation in order to reach it's intended strategic goals. 

Keep an eye out for more insights on applying strategy to modern marketing to achieve business goals.