09 Sep How to Set A Successful Advertising Budget
Setting a successful advertising budget can be a daunting undertaking. Today, there are so many media vehicles with varying degrees of options that it can be overwhelming to even know where to begin.
To start, you have to ask yourself (and perhaps your boss) several questions: What is more lucrative for your business – traditional or digital marketing? What will reach the most relevant audience – a radio ad or a social media promoted post? How long do I want to reach my audience? How expansive do I want to go in my area?
The reason this can seem like such a tremendous task is because there is no one solution for every situation. Every business has unique needs, and marketing plans must be individualized to meet those needs. You may have a different strategy and budget for each market you have a presence. To create a successful budget, it is important to understand how much money to reserve for advertising and what combination of campaigns will meet both that number and your business goals.
The Math Behind a Successful Advertising Budget
The first part of putting a budget together is deciding what dollar amount you are comfortable spending on marketing initiatives. Not sure how to come up with that number? Studies have shown that new businesses need to allocate about 12-20% of their gross or projected income to marketing, while established businesses need to allocate about 6-12%.
Why the difference? New companies must allot extra funds towards their marketing efforts because they need to capture new market share and develop brand recognition, both things that established businesses have already done. Businesses that have existed over 5 years often already have a steady market share and customer base. Therefore, they will assign their budget according to specific goals rather than for generating simple brand awareness.
The Role of Traditional Advertising in Your Budget
Traditional marketing includes print, broadcast, and outdoor advertising. Successful advertising budgets will utilize the traditional advertising avenues that will best fulfill their marketing goals. Traditional advertising campaigns run higher in cost than digital initiatives, but they offer benefits not found in the digital sphere. Check out some of the ways that traditional advertising can fit into a successful budget:
Print advertising uses physically printed media, like newspaper or magazine ads, to reach potential customers. This medium allows companies the creative freedom to create a unique and eye-catching message to promote their brand and solutions. Print is a great way to drive brand recognition and get your business out in front of a diverse clientele. Print ads are typically bought by publication and cost varies based on publication, size of ad, and DMA. If your business is looking to reach a wide variety of people in a certain area or reach an older demographic who may not be familiar with digital venues, print advertising could be a good fit for your budget.
Broadcast advertising includes television (cable and broadcast) as well as radio advertising. Television provides strong visual and audio elements to captivate the consumer. Radio allows advertisers to reach a niche audience through a multitude of formats in an on-the-go setting. Both vehicles are a great avenue for promoting brand awareness or promotions. The cost of television and radio ads depends on your market along with a variety of other factors such as daypart, channels, and length of schedule.
Outdoor advertising affords businesses a cost-effective way to reach on-the-go customers with 24/7 coverage on primary interstates and secondary roads. This medium includes posters, bulletins (aka billboards), buses, bus shelters, benches, and airport signage. Outdoor advertising leaves a lasting impression on your audience because many people pass the same signs every day as they travel. The extensive reach of billboards makes it a good medium for fostering brand awareness at a low cost.
The Role of Digital Marketing in Your Budget
Just as traditional advertising offers certain advantages, digital marketing also serves an important purpose within your advertising plan. Many digital methods come with low minimums. This makes them a good option for smaller businesses or companies with a tight budget. You also have more control over your audience with digital campaigns. This means that you are not spending money on people who are unlikely to convert. Here’s how different digital marketing initiatives may work for your budget:
Online advertising is an umbrella term that refers to search engine marketing, retargeting ads, targeted video ads, and display advertising. These marketing methods are a great way to increase conversions because of the ability to track analytics and optimize online campaigns as they run. They also allow for budgetary freedom and often only charge you when a consumer clicks on your ad or interacts with it for a certain amount of time, so you know you’re getting the most visibility for your budget. Online advertising campaigns often optimize as they run. The longer your campaign runs, the harder your budget is working for you. The cost of these methods varies by campaign type. However, the low minimum requirement of these types of campaigns lends themselves to supplementing other methods as well as running by themselves.
Social Media Promotion
Social media is a cost-efficient way to supplement a profitable advertising plan. By posting regularly on social media, businesses can generate brand awareness to their audience. While social media management can be effective on its own, it is generally more successful when combined with other digital or traditional marketing methods.
In addition, many social media platforms provide advertising options for businesses to use to drive conversions, similar to the online advertising mentioned above. These pay-per-conversion methods, such as promoted posts and sponsored content, have low minimum spends and high conversion rates.
Website Management and SEO
One of the most important business tools of the 21st century is your company’s website. It’s a vital foundation to all advertising campaigns. You will likely include your web address on any creative elements, so you want to be sure consumers are being directed to a functioning and informative page. Once you have a solid website in place, search engine optimization efforts will help maintain that foundation and grow your authority as an expert in your field. While building a website can be an expensive endeavor, investing in a solid foundation will only benefit other marketing initiatives later. If you do not have a site, or your site is not functional, this should be the first part of your budget.
Need Help Deciding on the Right Avenue to Optimize Your Budget?
Budgeting for anything is not an exact science, and advertising is no different. Need help creating a plan to fit your needs and available spend? The talented team at Media Venue has the knowledge, creativity, and resources to craft a strategy that will optimize the return on your marketing investment. We have worked with every budget level and business goal, and will use that experience to create the perfect plan for you! Contact Jaclyn Grieshaber at firstname.lastname@example.org to get started. Enhance your marketing investment with Media Venue!
About Our Blogger
Michelle Dunaway is the Social Media Manager at Media Venue. She has experience in social media marketing as well as digital marketing as a whole. Her background in both creative and academic writing help fuel her interest in blogging about the ever-changing marketing landscape.