Paid advertising is the backbone of many growth companies. Marketing spend scales your brand’s growth and attracts new customers.
However, your marketing costs can negate profits. Some companies spend $20,000 to make $10,000. Yes, the business grew, but that growth is unsustainable.
A marketing budget forces you to prioritize profitable activities. You can experiment with new marketing channels, but budgets cap how much you can lose.
Marketing budgets keep you in check, but they can also feel limiting. What’s the proper balance? We’ll discuss five tips for managing your marketing budget.
1. Allocate Funds for New Opportunities
Digital marketing strategies continuously evolve as more platforms become available. New social networks will emerge, and customer behavior will continue changing.
Programmatic advertising is one place to consider for your marketing spend. This article covers everything you need to know about using these ads for your business.
This marketing budget tip helps you prepare for the unexpected. You don’t want a restrictive budget to hold you back from opportunities you find in the future.
2. Optimize Your Web Pages
Spending money doesn’t guarantee results. Optimizing web pages gets more mileage out of your marketing spend.
Increasing your conversion rate from 2% to 3% may not sound like a significant improvement. It’s only a 1% difference between the two numbers.
However, jumping from 2% to 3% represents a 50% increase in conversions. Instead of converting 20 visitors out of 1,000, you will now convert 30 visitors out of 1,000.
Those numbers can add up in a hurry, especially if you optimize multiple pages in your strategy.
3. Spend a Percentage of Revenue
Don’t like the limited nature of a marketing budget? You can remove limits by tying your budget to revenue numbers.
Some business owners allocate 10% of revenue towards advertising. Making more revenue leads to a higher marketing budget.
You also avoid going over the top with your ad spend. Business owners who don’t follow the numbers may spend too much on ads.
4. Review What’s Already Working
Most digital marketing strategies double down on what already works. Business owners should spend more money on their best ads and reduce costs elsewhere.
You can still experiment with various marketing channels. However, you should focus most of your ad spend on what works the best.
5. Cut Your Losses
Albert Einstein defined insanity as doing the same thing but expecting a different result. Not all marketing platforms work for your business.
Not everyone becomes a TikTok star or uses Instagram ads for their businesses. These platforms work for some people, but they may not work for you.
Cutting losses helps you focus on strengths and explore new opportunities. You’ll free up space in your marketing budget by embracing a less is more approach.
Get Your Marketing Budget in Order
A marketing budget helps you manage your spending. Overspending can erase profits, but not spending enough can lead to stagnation.
Advertising platforms, influencer marketing, and other strategies can offer great ROIs. Sometimes, you have to spend money to make money.
Read more posts on this blog for additional marketing insights. The resources here will help with your marketing budget and other initiatives.
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