The Budget. Once upon a time (and almost at the beginning of a new financial year), Mr W, who was sat in his favourite chair by a warm fire, put down the copy of his business plan that he’d been reading (that he always reviewed and kept up to date of course) and reached for his marketing budget planning spreadsheet so that he could review it before the next meeting to finalise budgets for the new year. It had been a profitable year and Christmas had been a real success for his online wolf suit company, (thanks to his cleverly planned and well executed online advertising campaigns) and he was about to announce to his company just how good a year it had been. Sound familiar?
No? and chances are you’ve no more looked at your business plan in the last few years (since it was written, if it ever was) than carefully planning out your advertising spend a year in advance. Why not? because in reality you’re probably wearing a few different hats (and wolf suits), balancing your business/family/life etc but it is, of course, all on your to do list.
I can’t recommend the importance of that advanced planning not only for the sake of being organised but for the fact that it will most likely help you to make more money! Right I’ve got you interested… So here’s how you do it.
What’s Your Budget?
In my experience clients either have a set budget for marketing overall and that’s that or it’s all dictated by what they can afford/cashflow allows them to spend.
It’s understandable really, the business and marketing books will give you guides.. 10-20% of turnover in your first year, less once you are an established brand but that’s still a bit vague. Here are my thoughts on how to get there:
- If you are a new business work out what your target turnover is for the year – let’s say £250k
- If you are an established business, what do you want to grow by this year? 25% more?
- Know what your profit margins are and build that in
Reach a figure and write it down, don’t worry as you will also write down your actual revenue each month as well and this will help you see if you’re on plan or need to adjust. don’t ignore what the figures are telling you’ after you say to review the plan regularly. Having knowledge is the first (empowering) step but you mustn’t ignore what you know now, especially if it isn’t good news.
Ok, so ask your self the following questions:
- Do you know your customers well enough (not personally but in terms of demographics), existing and potential?
- What do you know about what your competitors are doing and spending in terms of paid for advertising?
- Do you have anything to review from the previous year in terms of return on investment? which was most successful?
- Which were your best months for revenue?
- Which were your highest spend months?
- Do you know what your website conversion rate is?
- Did you have to turn off seasonal/highly competitive to your sector, campaigns because you ran out of budget?
- Do you believe that if you spend more on advertising you will generate more income?
Perhaps you know who all of your competitors are or perhaps you have new competitors or are looking at new markets to sell into this year. It might be that last year your email marketing campaigns and affiliate marketing were the most lucrative in terms of revenue generating and that the Christmas trade period actually carries over a few months for you. You may well have been frustrated that the big brand store bid you out of the market for your most popular keywords on Adwords, this happens all the time, but if you know it will, then you can prepare for alternatives.
Google has a useful tool called Display Planner and this can help you to work out what historical costs were for specific keywords and phrases. Google also offers Trends which can give you an idea about what is generating the most search traffic.. why else did lots of brands find a link between their product/brand and rugby recently!
If your online business peaks at Christmas, you’ll know that your highest spend months will be November, December and possibly January too if you run a sale, allow for this in your overall advertising spend plan as you can generally cut spending in other months to make up for these increases.
Just can’t compete financially using tools like Adwords over certain periods? Well if you know this in advance you can either plan better to create more budget and get you back in the game, be more selective on your campaigns or ramp up other activities in time to help boost your traffic and revenue in this time.
Affiliate marketing can be a very effective tool but it’s not a quick hit and does take some time to start generating results, back to planning again.. the great thing about affiliate marketing is that you only pay on actual sales generated and so the return on investment tends to make it very attractive.
Get it down on paper, write out your 12 month plan and add a row in for actuals.. review this weekly or monthly as needed and adjust it, this should be a working document and won’t solve all of your problems but the fact that you are writing it down will make a huge difference.
Does it convert?
One of the key areas often overlooked when trying to boost up traffic to your site is what happens to that traffic when it arrives, does it convert to sales/enquiries/bookings? Sometimes money can be made just by addressing a few issues on your website, a small tweak here and there or a bigger focus on the customer experience can make a huge difference.
Is your site responsive and does it offer an equally fantastic experience when viewing on a mobile or other device? Have a look yourself…try and purchase something…nice and easy?
Can we help you?
If you’d like some help and support in creating a plan or in delivering your advertising campaigns, please get in touch, even an hour or two of our time could make all the difference.