Should my company bring digital marketing in-house or outsource? Try a combo of both
Digital marketing has proven itself to be one of the most effective types of marketing. Email, social media, content marketing, search engine optimization, digital advertising - each of these tactics can be essential to business success in 2020.
Especially during a crisis when your customers can't make it into your retail location. That's probably why as many as 95% of organizations have increased their digital marketing budgets in recent years, according to DigitalMarketingInstitute.com.
Right now is the time to change your mindset when it comes to a “budget” for digital media marketing. Social media is the best way to communicate with your customers, and putting your dollars into creating content, and pushing digital ads should be on your radar. Especially for businesses that are currently pivoting to provide e-commerce products and services.
We know that we need to put some of our marketing efforts toward social, but we're often not sure where to start. Here are some of the things to think about when setting a realistic digital marketing budget for your business.
How much you should spend depends on your business?
According to Google Ad management company WorkStream, the general rule of thumb is that a brand-new business should spend more (about 12%-20% of their gross revenue) on their marketing efforts because they are not known. It typically costs more to gain new customers than to keep the ones you currently have. Established companies should be contributing 6%-12% of their gross revenue to marketing efforts, as a whole.
Of course, this is definitely not a hard-and-fast rule.
If you're an established business looking to expand into new channels, you may want to temporarily increase your marketing budget to gain new customers.
The same goes for smaller businesses: If you have more business than you know what to do with at the moment, scale your budget back for a bit and reinvest the allocated money into production efforts.
Your budget is dependent on where you are in your business journey and what you realistically want to accomplish with your marketing.
This part is key.
Be realistic. If your company wants to spend zero dollars on digital marketing, then it's really just a self-fulfilling prophecy that your social media and digital marketing efforts won't work. You have to invest in it.
Looking back on marketing efforts
The beauty of digital marketing is that it allows you to gain an understanding of which tactics are working for your brand and which are a waste of resources. Before moving into the future, dive into your analytics to see what is currently working, what roadblocks you are experiencing, and how much you are currently spending on everything.
Dive into your analytics on your website, social media, your customer resource management system, and Google to get a general overview of your sales.
Which platforms am I getting the most sales (online, retailers, or in-store)?
Where is that traffic coming (this is easy to determine online; for in-person customers, you can keep a log of where people heard about your business)?
Create a spreadsheet list of everything you spend your marketing dollars on. Add once-a-year fees, monthly expenses, and don't forget to add costs for the time spent implementing and managing any of these tactics by your internal team (how many hours per tactic multiplied by their pay, or add how much you are currently paying to outsource).
Some digital marketing tactics to add to this spreadsheet:
Social media - strategy, photography, video production, graphic design, copywriting, community management, etc.
Software and tools
Paid digital advertising
SEO, blogging, website and hosting
Some other marketing tactics that are not digital:
Cost for winemaker dinners
Flyers or brochures at hotels, etc.
Public relations efforts
Marketing efforts for local activities (i.e., city parades, 5K runs, or community rebuilding efforts)
Knowing which marketing activities are getting the best return on your investment allows you to add additional funds into making those tactics even better, and subtract funds from tactics that are not delivering sales (if sales are your digital marketing goal). Get together with your team to brainstorm ideas on how to make what's working even better, or how to fix what may not be working. Create a game plan from this brainstorm and take action!
Outsource, or do the work internally?
Of course, one of the biggest questions about expanding marketing efforts is, “How can I be the most cost-effective with marketing?”
There are a few options for brands. They can do all of the work themselves, hire an outside digital agency or freelancer (like myself) to help with specific parts of marketing, or ignore social media completely - which you know I do not recommend.