Why Fixed Digital Marketing Budgets Don’t Make Sense

When it comes to planning for a successful 2013, the first thing you should do is agree a budget for the year, then choose what areas you want to spend it in and then press ‘go’ and hope that all your plans and estimates prove correct over the next 12 months…

Wrong!

Marketing has changed, a lot. Gone are the days when everything was driven by a budget fixed and spread for the entire season or year. Why? These are the five key reasons:

1. The Answers Come Quickly

With traditional forms of marketing, you have to spend a considerable amount and then wait, sometimes as much as two to three months, to discover how your marketing has performed. Therefore setting a budget made a lot of sense.

Today, with digital marketing, you can sometimes have an answer that same day and, if not, then within a few days or week, with much lower initial outlay and the ability to adapt campaigns instantly where required.

2. The Returns Happen (or they Don’t)

With ecommerce it’s very easy to see the initial income and to estimate the future revenues. For businesses with an advertising model, it is equally straightforward to see the immediate and longer-term impact of increasing traffic and overall reach. Anyone who needs to profit from leads or enquiries, should also have a firm idea of their overall value to the business.

So, the returns either happen, or they don’t. Unless something dramatic happens either to your marketing, or your proposition, you can be confident that the trend will continue. Optimisation helps, but generally only improves on underlying performance. You can only optimise something with potential.

3. You Have Many Options and You Can Switch

The main stumbling block to your overall success will be unnecessary limits you may have placed on the range of digital marketing available to you. Most clients we work with think that the answer is in one specific discipline – for example SEO, or Social Media – and therefore discount some very effective means of growing their business.

If you’ve reached a road-block, then there you need to consider other areas, seriously.

4. Testing Needs a Short Cycle

The modern business needs to have a much shorter cycle of testing, in that way it can be much more nimble and achieve greater returns and, equally importantly, waste less budget.

Once the returns can be measured very effectively using a combination of analytics, conversion tracking and attribution. In short: you can see what is being spent, where, and the returns coming in… virtually in realtime. So, the only thing stopping you being more nimble, is you (or your agency)!

5. If it Works, Why Cap It?

Finally, if there’s one thing we don’t understand, is the marketing dinosaur who’s still a slave to their budget. When things are good, why stick to your budget? You need to up the ante!

If you’re a Marketing Manager and something positive is happening in the numbers, it’s time to get in your boss’ face and ask for more. You can, and we have doubled, tripled and quadrupled turnover in a month for clients in the last 12 months, but only by showing them the evidence and telling them to invest right now.

So, if you can make one New Years’ Resolution for your digital marketing – it should be this: don’t budget, be versatile!