By Peter Boyd, a Florida attorney who founded PaperStreet. He has helped over 1,500 law firms with their websites, content and marketing.
Strategic allocation of your marketing budget is essential when it comes to paid ad campaigns. You want your ads performing when your potential customers or clients are most in need of your services.
If you work with a professional marketing firm on your campaigns, your marketer should be able to help you develop a plan for the right allocation and stay on top of the distribution of your funds. If you are taking charge of things yourself or just want to understand your options, here are five suggestions to distribute your money evenly in paid advertising campaigns.
Understand your marketing goals.
In addition to understanding your overall budget for your ad campaigns, you also need to understand your goals for the campaign, as well as overarching marketing goals for your firm. The popular SMART goal target is a good one to keep in mind. Marketing goals should be:
• Time-sensitive or time-limited
An example of a goal that fits the SMART guidelines would be one aimed at increasing revenue from new clients in a particular service area by 20% by the end of the quarter. Your goals can not only determine which marketing channels make the most sense for the situation but also how you should allocate funds to support the goals.
Develop a rough plan for an entire year.
Before focusing on details, it is a good idea to have at least some picture of the overall advertising strategy. Think about how your potential clients make the journey from discovering your firm to becoming a paying client. Make sure your strategy reaches potential customers or clients at various stages in the journey.
Your marketing plan may include a variety of tactics (and so you will need a separate budget for each). At the very least, consider how you will use:
• Pay-per-click advertising
• Search engine optimization strategies
• Social media advertising and other paid marketing
• Email marketing
• Web design changes
• Conversion rate optimization
Who will be doing the work in each case? Do you have a marketing staff with the knowledge and bandwidth to handle tasks? Will you be looking for freelance talent? Will you hire a marketing firm? How much time will you have to supervise?
If you enjoy a hands-on approach to marketing, you may want to build your own team of freelancers. On the other hand, if you’d rather focus on other aspects of your business, then it might make more sense to outsource the work and oversight to a marketing firm that is focused on maximizing return on investment for these factors.
When considering how much to invest in each strategy, a popular tactic is to devote 70% to strategies proven successful for you, 20% to new strategies aimed at growing business and 10% to experimental or emerging strategies that can keep you ahead of your competition.
Calculate anticipated expenses and ROI.
For each marketing strategy in your overall annual plan, estimate the cost and the return on your investment. When factoring costs, remember to include all potential expenses, including PPC ads that don’t convert, software and additional team members—whether staff or freelance associates.
Estimating ROI is much more difficult than figuring your estimated expenses, but you can start with average conversion rates based on published research. Remember that these amounts vary tremendously by industry, so calculate accordingly.
Allocate spending among your strategies.
Using the information gathered earlier, the next step is to allocate your budget to various marketing channels and across various timeframes. Consider whether spending for a particular strategy should be timed on a monthly or quarterly basis. For instance, if your campaign is promoting the launch of a product or service that may not be ready until the middle or end of a given month, you may want to set up a quarterly schedule for ads in that campaign.
Take into account seasonal variations that affect your business. For instance, if your business is marketing primarily to other businesses, the later parts of November and December will not be a time of optimal growth because businesses tend to go into a holding pattern during the holiday season. It might be best to load ad spending earlier in those months.
Track and refine.
The most important step, from the perspective of keeping your spending appropriately distributed, is to monitor your campaigns and make adjustments according to the results. Track key performance indicators for each campaign and gauge their success. Then use those findings to adjust the budget for the next campaign.
A campaign that performs well might deserve more funding. But a campaign that performs poorly does not necessarily deserve a budget cut. Instead, you might be better off changing your approach for that campaign. If a strategy is a key component of your marketing goals, consider trying alternatives before you pull the plug on funding.
As you go throughout the year, your data can not only help you adjust your spending so that it is distributed where it needs to be, but it can also help you develop your marketing budget for the following year.
It’s an art, not a science.
Your goals and circumstances drive the allocation of funding for paid marketing efforts. There is no “best” way to distribute your money. You need to determine the allocation that best suits your projections and then be prepared to adjust as you analyze the results.
While you need to prepare, you also need to keep a flexible mindset and be ready to adjust when preparations don’t provide the results you anticipated. Consulting an experienced marketing firm for assistance can help provide perspective and shorten the learning curve.