Digital marketing is a fundamental process any growth-oriented company should invest in for expansion and to achieve various goals. Given the fact that digital marketing is significantly less expensive than traditional marketing, but at the same time much more effective, it only stands to reason that you should double down on your digital strategy in order to take your company forward in 2021 and beyond. That said, we can’t pretend that digital marketing does not require a notable financial investment.
For companies operating on a limited budget, digital marketing can quickly drain them of financial resources, especially if you invest in the wrong tactics at the wrong time. Some marketing strategies like content marketing are never wrong, but you could be implementing them in a way that makes your marketing department bleed money. To put a stop to this, you have to start managing your marketing expenses efficiently and effectively.
Let’s take a look at the five tips that will help you optimize your marketing expenses and run a much more cost-effective operation.
Start with a list of your marketing expenses
First things first, in order to get a hold of your marketing expenses, you have to know exactly how much money you’re investing (or losing) on different marketing tactics, campaigns, and strategies. Your goal is to get a comprehensive overview of your marketing spending, but also to delve deep into each marketing tactic you employ to see how much money it’s wasting and how you can plug each financial leak.
To start, simply make a list of all the marketing tactics and methods you’re currently implementing in your digital strategy. Each of these tactics should have a set of KPIs that you’re monitoring, and these will tell you whether these tactics are delivering the expected results. You can compare their performance with the amount of money you’re pouring into each tactic to see if it’s creating a positive ROI.
For example, one of the easiest tactics to monitor is PPC, because you can directly monitor the conversions vs how much you’re spending on keeping the ad campaigns going. If people are clicking on your ads but are not converting, you’re losing money, and that’s telling you that you should either pull the campaign or optimize it for higher conversions.
Set clear and attainable marketing goals
Next, you should revise your current marketing goals, optimize them according to your findings, and work on setting new, more attainable goals in the process. The best way to do this is to implement the SMART approach and create marketing goals that are specific, measurable, attainable, relevant, and time-bound.
For example, your goal might be to increase user engagement on your website, but it’s important to put in the SMART parameters to make it financially sensible. The smart model will help you prioritize your spending, but more importantly, allocate the right amount of financial resources to ensure you reach that goal without going over your budget.
Pay less for marketing with tax deductions
Optimizing your marketing expenses is not just about cutting costs or making better financial projections, it’s about managing your taxes, as well. Yes, taxes play a big role here, and being diligent with your tax planning and knowing how to deduct marketing expenses from your taxes can help you save a lot on expensive marketing and advertising strategies. A good example where this is a popular financial tactic would be a highly competitive market like Australia.
In the Land Down Under, business leaders almost always work with an experienced tax accountant in Sydney to figure out which advertising expenses are tax-deductible to reduce the amount of taxable income they report each year. This means that you’re paying less tax, and it allows you to better allocate your finances for marketing purposes.
Of course, no matter the market you’re operating in, you should work with reliable accountants to minimize your expenditure and optimize your tax spending for maximum financial savings.
Build a comprehensive marketing budget
Managing taxes is an important part of budgeting in general, and you have to manage your budget carefully if you want your marketing campaigns to produce a positive ROI. Unfortunately, business leaders will oftentimes grossly overestimate or underestimate the financial requirements of certain marketing processes.
This leads to setbacks, budget breaches, and general inefficiency that leads to financial waste. Needless to say, this will prevent you from improving customer experience and converting leads into loyal brand advocates. Instead of wasting money, make sure to download a comprehensive marketing budget template, do your research, and start allocating the right amounts to each tactic and process.
Monitor the right data and optimize expenses
Finally, understand that you can’t optimize or eliminate extraneous expenses if you don’t constantly monitor the performance of your campaigns and make adjustments as you go along. This is not a set-it-and-forget-it type of deal, and it’s important to stay on top of your spending, collect the relevant data, and keep optimizing your investments.
Make sure to use a centralized dashboard where you can oversee all your KPIs and goals, and monitor how much you’re spending on each marketing tactic vs how much you’re gaining in the short, mid, and long term.
Over to you
Digital marketing is essential for business success, but it can only yield the desired results if you optimize your spending and allocate finances towards the right tactics and strategies. Be sure to use these tips to better manage your marketing expenses and keep your company financially stable no matter which marketing and advertising tactics you invest in 2021.
