With a looming recession, marketers nationwide are tightening their belts and looking for ways to maximize returns on a shrinking budget. At times, it might seem like squeezing water from a stone. But with careful planning and the right tools, you’ll be swimming in conversions in no time. Let’s dive in to your ecommerce marketing budget.
First off, let’s get familiar with the ecommerce landscape so you can get a better idea of how to plan your digital marketing budget. Here are a few stats to consider as you begin the process.
There are plenty of retail ecommerce dollars to go around. Researchers expect sales to exceed $6.3 billion in 2023—a 112% increase over the last five years. By 2026, that number should swell to more than $8 billion.
Mobile ecommerce, also known as Mcommerce, is also on the rise. More than 43% of online shoppers reported buying products from their mobile devices in 2022, underscoring the importance of a seamless smartphone shopping experience, as well as an easy-to-use web experience.
If your ecommerce website conversion rate is somewhere around 2.5%, you’re batting about average. Keep in mind that industries with the lowest conversion rates are home furniture and luxury apparel and accessories (~1%), while the highest is food and beverage 4.6%.
If you want to reach younger consumers, you better have a solid social media marketing strategy. More than 50% of Gen Z and Millennial consumers reported buying products from social media, whereas Gen X (38%) and Baby Boomers (22%) were far less likely.
Despite a volatile economy, 54% of companies interviewed in a recent survey said they expect to increase their marketing budgets in 2023, while 29% expect their budgets to stay the same. The study also found that companies allocate about 66% of marketing budgets to digital channels.
On average, brands spend about 10% of their net revenue on marketing. This number will likely be lower for a large company with good name recognition. A young company looking to get the word out will probably be somewhere in the teens, at least.
OK, now it’s time to hammer down that budget. Here are some tips to get you started.
You have to have clear goals and milestones you expect to hit along the way if you want to get your budget in order. Otherwise, you won’t even know what you’re optimizing.
Some common goals might include:
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Take plenty of time to get to know your target audience so you know who is most worthy of your marketing dollars. Who is buying your product? What makes them tick?
Start with the basics:
Determine which channels and what type of content your audience likes to engage with most. Is it Instagram, blogs, newsletters, email marketing, or something else? Chances are it will be a combination of multiple channels, so it’s up to you to decide which are most fruitful and allocate your dollars accordingly.
When you’ve figured out which channels your audience prefers, allocate the most funds to the most popular channel and work your way down. For example, if your audience spends most of their time on Instagram, you’ll want to pour most of your marketing funds into Instagram ads and influencer marketing.
There are a couple of different strategies you can implement to get the most out of your content marketing budget.
First, you’ll want to focus on creating fun and engaging content. Think about things that are easily digestible and entertaining as something is mindlessly scrolling on your phone.
Next, you’ll want to dig a little deeper. Go back to your audience’s pain points and come up with content that will help them solve common issues. This will help you establish yourself as an expert in your industry and help you establish more trust and credibility with your audience.
A manual process for certain marketing workflows makes sense for young brands, but as you scale, you’ll need to automate wherever possible to avoid adding unnecessary headcount and free up bandwidth for your employees already on staff.
Some commonly automated workflows include:
Your biggest fans are also your best customers. Do everything you can to encourage repeat purchases, whether through loyalty programs, personalized offers, or anything else that will make your audience feel valued.
Keeping up with the latest trends will help you stay ahead of the competition and identify opportunities while they are still cost-effective. Plus, by being able to predict future industry trends, you can bail on strategies that have run their course before you end up wasting your budget on them.
An optimal bounce rate is somewhere between 26-40%. There could be a number of reasons why your bounce rate is on the higher side, but double-checking your web experience is a good place to start. Ensure your website and mobile app are intuitive and checkout is easy. Otherwise, you could be leaving dollars on the table.
Incentives and promotions might cost you some money upfront but are a great way to attract new customers, retain existing ones, and increase brand engagement.
Some tried-and-true incentives and promotions include:
Collaborating with influencers is one of the most cost-effective strategies available to marketers. Leveraging creators who know your brand, use your products, and genuinely believe in both will provide the social proof you need to build serious love with your target audience with content that resonates.
There are tons of reasons why your brand should optimize your influencer program, and we’ll get to some more of them shortly.
According to research by Epsilon, 80% of consumers say they are more likely to buy from a company if it offers them a personalized experience. After collecting adequate data on your target audience, you should be able to offer more personalized recommendations, product offerings, and web experiences to increase customer satisfaction and loyalty.
Make sure you’re keeping a close eye on your campaigns so you can tweak them when necessary to ensure you’re getting the best ROI from your efforts. Leverage A/B testing, automated analytics tools, and whatever else you can find to get a clear picture of your campaign and program performance.
There is no such thing as a throwaway campaign. Even if a strategy didn’t get the results you wanted, there is always something to learn. Take plenty of time to debrief with your team after a campaign to evaluate what you did well, what needs improvement, and the steps you can take to ensure a bulletproof strategy moving forward.
Regardless of budget, there are content creators out there for you. If you’ve got plenty of cash on hand, you can collaborate with macro or celebrity influencers and blast your message out to millions of followers. It’s a quick way to increase brand awareness and a safe bet for getting some earned media and conversations started about your brand.
But most brands probably don’t have the budget to partner with many household names in the creator economy. If that’s the case, plenty of nano and micro influencers can be just as effective at helping you reach your goals. Not only are these creators cheaper to work with, but they tend to have a more personal relationship with their followers, who trust them when it comes to honest product recommendations.
Collaborating with influencers is a great way to hyper-target your reach.
For example:
Research shows that about seven out of 10 online shoppers fail to complete a purchase after adding an item to their cart. But don’t worry, influencers can help.
Leveraging content creators helps provide the social proof needed to get consumers off the fence about a product they’ve been going back and forth on. In other words, if it’s good enough for their favorite creator to get the results they’re looking for, the shopper can be confident it will be good enough for them, too.
Creator content goes beyond social media. When done right, creators can make life easier for everyone on the marketing team. Just consider all the amazing content you can accumulate for your website, newsletters, email marketing, paid ads, and more. The possibilities are endless! Just make sure you get the necessary content rights before repurposing creator content throughout your marketing funnel.
If creators are using your product with great success, consumers will notice. And you’ll get an extra bonus if audiences view the creator as an expert in their field.
For example, if you’re one of Dwayne Johnson’s 369 million followers, chances are you’ve seen him promoting his Under Armour partnership. If Under Armour is good enough to help The Rock make gains, it’s good enough for you and me, too.
But there are plenty of “expert” creators out there who are far more attainable (and affordable) than someone like Johnson. The key is getting your products in their hands so they can show their audience how amazing they are.
Optimizing a digital marketing budget starts with careful planning. Once you understand your goals and target audience, you can experiment with the most cost-effective ways to reach them.
Frugal marketers have found that leveraging influencers is one of the most budget-friendly options for generating brand awareness and driving sales. By partnering with content creators with genuine brand affinity, they can pass their excitement for your products on to an engaged audience eager to try something new or make a repeat purchase.
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