How to Optimize Your Ecommerce Marketing Budget for Maximum ROI (Updated May 2019)

GRIN also recommends this Guide: Step-by-Step Guide to Optimize your Ecommerce Budget


Proving marketing ROI and getting enough budget are two of the biggest challenges faced by marketers in all fields, including ecommerce. Setting the right ecommerce marketing budget is crucial to the success of your marketing campaigns.

Many ecommerce marketers struggle with setting the right ecommerce marketing budget and getting the best ROI from their marketing initiatives. Another daunting task for most ecommerce companies is attributing the ROI to the right marketing activities

In this article, we will tackle all of these challenges and provide tips to get the maximum ROI from your ecommerce marketing budget.

Following is a step-by-step guide to optimizing your ecommerce marketing budget for maximum ROI:

Hand Picked Content

1. Set the Right Marketing Objectives

The first step in optimizing your ecommerce marketing budget is to set the right goals for your marketing campaign. This will help you decide what marketing strategies to use and how to measure the ROI of your campaign.

Some of the most common goals for ecommerce companies are to drive website traffic, increase sales, and improve customer loyalty (get more repeat customers). You can select one or all of these objectives, but keep in mind the following tips:

  • Make your goals as specific and time-bound as possible. For example, instead of just saying that you want to increase your sales, specify how much and within what time period. You can state it as something like “increase sales by X% in FY18.”
  • Set realistic goals and avoid wishful thinking. For example, if your company has been growing at an average of 4% for the last five years, you can target to achieve 5%-6% growth by implementing a marketing campaign. However, if you set a goal of 20% growth, you are bound to fail.
  • Set the goals based on the current needs of your business. If you have a new business that people don’t know about, your priority should be to drive traffic to your website and gaining visibility, instead of increasing customer loyalty. On the other hand, if you have a well-established business, then the focus could be on long-term goals like building customer loyalty and improving brand engagement.
  • Set goals that can be tracked and measured. For example, if your objective is to increase customer loyalty, you need to define your goal as an increase in repeat purchases by customers. This is because loyalty is subjective and can’t be measured, however, repeat purchases by customers can be easily tracked.

Once you have set the right marketing goals, you are all set to formulate your marketing strategy and allocate proper ecommerce marketing budget.

2. Formulate a Marketing Strategy Based on Set Objectives

Once you have a clear idea of what you want to achieve from your marketing campaign, it is time to finalize your marketing content and channels.

You can choose from a variety of marketing techniques, such as content marketing, PPC campaigns, email marketing, influencer marketing, and traditional advertising. You can use some or all of these techniques for your ecommerce marketing campaign.

Once you have decided what techniques you want to incorporate, make a list of all of your planned marketing activities for the year. This will help you determine your total ecommerce marketing budget, as well as the spend for each activity.

3. Allocate a Budget for Various Marketing Activities

According to a Gartner survey, 47% of CMOs still follow traditional budgeting methods to allocate marketing budgets. They usually either use the previous year’s budget or increase or decrease it by a certain percentage, instead of calculating it based on current year’s planned marketing activities and goals.


Image via Gartner

To optimize your ecommerce marketing budget to achieve maximum ROI, its better to follow more advanced budgeting methods, such as activity-based budgeting.

In this method, you can check the past ROI of all types of marketing activities and allocate higher amounts for those with better ROI.

For example, if in your past campaign you have seen that you get more return from your influencer marketing campaign than display advertising, focus more on influencer marketing this year. This method aims to maximize the ROI of your ecommerce marketing budget, by investing more in high-return activities and less on less effective, outdated methods.

Even if your business is new and you don’t have past data to allocate your ecommerce marketing budget, you can still use this technique by benchmarking against competitors. Find out what activities other marketers are spending on most and allocate your ecommerce marketing budget accordingly.

According to the previously cited Gartner survey, these are some of the activities where CMOs invest a part of their marketing budgets:

Cmo Gartner
Cmo Gartner

Image viaGartner

Hand Picked Content

4. Define KPIs and Establish a Process to Measure ROI

Now that you have a list of marketing activities, with individual budget allocations for each. Next, it’s time to define your KPIs to measure the performance of your ecommerce marketing campaign.

One of the biggest challenges in measuring ecommerce marketing ROI is to attribute the results to each marketing activity. If you don’t have a clearly defined process of measuring results from each activity, it will be difficult to measure the right ROI.

For example, let’s say that your revenue grew by X amount in one year. However, you don’t know which activity led to the highest increase in revenue, because you were not tracking the KPIs for each.

Situations like these are very common and can be easily avoided simply by establishing a process to track the ROI of your marketing activities.

Following are some examples of how you can track KPIs for each marketing activity:

  • If you are running a PPC campaign, use Google Analytics or some other analytics platform to measure KPIs. The most common KPIs for such campaigns are:
    • Number of clicks
    • Click-through rate
    • Conversion rate
    • Cost per click
    • Google’s quality score
  • If you plan to run an influencer marketing campaign, use an influencer management platform to easily track and measure the campaign performance and ROI
  • You can also use analytics tools to measure the ROI of your SEO campaigns. Some common KPIs include:
    • Organic sessions
    • Keyword rankings
    • Leads/conversions
    • Bounce rate
  • For social media marketing, you can look at the number of views, likes, and comments on each post. You can also measure the SEO performance of the website backlinks used in social media posts.

No matter what strategy you are using, it is important to track and measure KPIs to measure its performance. If you don’t have a performance tracking process in place, set it up now.

5. Take Your Ecommerce Marketing Further for Maximum ROI

After completing the four steps mentioned above, you are all set to execute your marketing campaign to generate high ROI. However, I have one more trick up my sleeve that will take your ecommerce marketing budget one step further, to get even better ROI.

Are you ready for it?

Well, it’s just the plain, tried-and-tested technique of targeting the right customers. I know it is something that every marketer knows and one of the first things taught in marketing schools. But people often forget its importance. Despite having the best marketing strategy and the optimum ecommerce marketing budget, marketing campaigns can still fail if they are not targeted at the right audience.

If you clearly define who your target customers are and how they like to purchase, you can further optimize your ecommerce marketing strategy and get the best possible ROI.

Read this article for a comprehensive guide on how to reach the right target audience to achieve your ecommerce marketing goals.

Hand Picked Content


All ecommerce companies want to achieve the best ROI for their marketing campaigns. However, not all are successful in optimizing their ecommerce marketing budgets for maximum ROI. You can use the guide above to get the best out of your ecommerce marketing budget and excel at digital marketing.

Share your success stories using these techniques and any other tips you may have in the comments below.

Was this article helpful? Give it a share!

What the best brands are doing to drive revenue from influencer marketing

Whether you are just getting started with influencer marketing or already have your program in place, this guide gives you the tools to get the return on investment your C-level will love.