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How to Spend Your Online Marketing Budget

22 August 2011 BY

Greetings marketeers and search geeks. Today’s post comes as a result of the wonderful power of crowd-sourcing – which, if you have a decent network of friends in your industry is a great way to find blogging ideas, but that’s another post!

As a general rule I don’t like to blog about things that have been analysed to death and more importantly on things that people won’t be interested in reading. So, yesterday afternoon I put the question out there and a hat tip to Mr. Richard Fergie who suggested the following which I thought would be a great topic to cover: “if you had £1,000, £10,000 and £100,000 monthly budget what would you spend it on? And saying “it depends” is lame”.


So, on with the post!

Introduction

Despite what Richard said about how saying “it depends” is lame it is probably worth putting in a quick word of warning that it does depend (very much in fact) about what type of site you have, how old your business is and what you are hoping to get out of your marketing efforts (branding effort, sales, in store visits, etc). However, rather than use this as a cop-out today this excuse will be treated as a framework.

We’ll take each price point and look at the following types of businesses at each level (sorry, no doubt we’ll miss some off here): start-up, eCommerce site, local business, brand.

*It is probably worth noting that I am (first and foremost) an SEO so my advice will probably be skewed in this direction as I do believe it is a long term investment in a company rather than a “now it’s here, now it’s gone” mentality with some of the other advertising channels. Increasingly I feel as though you could group Social in this category as creating a community around your users is essential to the sustained success of most companies in this day and age.

This is how I would advise and how I would spend the money were it me. This is just one person’s take though so we definitely want to hear how others would spend these budgets in the comments below!

If you Had a £1,000 Monthly Budget How Would You Spend it?

Start-Up/Brand New Site

I think it is probably reasonable to assume that a start-up (particularly one that had been bootstrapped) would have this sort of budget for online marketing in the early days though I would urge the need for a stronger budget. There isn’t a ton that can be done with £1,000 online (especially without having a great set of freelancer contacts on LinkedIn) in this day in age though I would suggest the following breakdown.

First 3 Months: Build or iron out a useful site that looks nice, runs quickly and has an intelligent information architecture. Most importantly, make sure the site has a CMS that you understand and are comfortable with. On a budget of this size you are going to be creating and tweaking a lot of content yourself most likely so it had better be in a way you can manage. WordPress would probably be a good place to start.

Months 3-9: I would probably suggest some general marketing/PR efforts at this point as well as some low-level SEO. It would probably worth slowly ramping up some PPC as well depending on how competitive the SERPs you are chasing (~£200 per month). The mantra of any good start up should be to become a brand and a household name so focus on branding led efforts at this stage to get a jump and build up some trust.

Months 9-18: If things are going well I would suggest starting a small-scale affiliate effort (and payout to affiliates would be conveniently taken from a different budget). Affiliate work can be a great way to get other people to advocate for your brand and can be a clever way to build up sales (if not backlinks) when implemented wisely. At this point I would also ramp up SEO efforts around non-brand terms.

Months 18+: Do what works! Hopefully things will have taken off and you can invest in some in-house staff to focus primarily on online marketing. I would advise continuing to spend on the pressure points and the marketing streamss that are making you the most money. At this point in a campaign I would hope you should have a clear idea of what’s working and what’s not and scale-up spend or focus on the highest converting channels. If you’ve been too reliant on paying for your traffic though it may be time to start looking for something a bit more sustainable.

eCommerce Site

If you are in the above camp (i.e. new to the game) then I would suggest following similar efforts as above despite the fact that you would have a number of product pages to worry about. There is definitely an advantage in building a brand around your name before shifting to a more product led drive. As for spend on SEO vs. PPC it really should come down to which is the most cost effective channel and how long you have been given to prove your chops – if you have more time focus on unique content around each product and building links, if you’ve got to prove results fast crank up the PPC on highly converting terms.

At this price you’re going to have to make use of friends and connections you have and probably need to manage a great deal of these efforts on your own. In general, I would focus on SEO if you have a well organised and well established site, but some niches will call for an increased spend on PPC. For me it really is basic economics: if you’re making more per click than you’re spending it probably makes sense to continue using PPC.

I would probably suggest somewhere in the 60/40 split between PPC and SEO depending on results. Again, you’re not going to get a ton on this budget in either camp in most markets so choose wisely and think about the long term (if your contract allows for it).

You should also be prepared to get involved in running competitions and giveaways because you’ll be needing them to support the SEO efforts.

Local Business

I would personally spend 80% of the budget on optimising both your site and entries for Google Local and potentially in finding a good Local SEO who knows what they’re doing and won’t charge you through the eyeballs for this. With any luck you live in a small city or town so hopefully location based keywords won’t be too expensive so go ahead and spend the remaining 20% on PPC.

Claim your location everywhere you can (Foursquare, Gowalla, Facebook, etc.) and dip your toe into social in your own time. Managing a small business location should not be too demanding and rewarding users can be a great way to keep them coming back.

Being genuine goes a long way too (even in building links) so make sure your locations are charitable and good community members.

Major Brand

If you are a major brand and you plan to spend £1,000 on online marketing you are delusional. Unless you have figured out a way to get free press (and some brands definitely have) you are very unlikely to see any sort of return that you board would care about on this activity.

 

If You Had £10,000…

Now we’re talking. £10,000 a month is a much more reasonable budget forsome of these activities and probably too much for some of the others.

Start-Up/New Site

With this sort of funding my personal view would be to hire a bright and promising individual who is willing to work for less than £30k. That should be a reasonable enough salary to attract some very bright people – but make sure they are very hungry and committed to helping you get the site off the ground. If you can swing it, get an intern or two in to support with linkbuilding.

Expect to spend the rest of your budget working with an agency or two to manage your online marketing efforts and ask for prescriptive consultation that your new team could then implement. The agency you choose should be good at a number of online marketing activities (CRO, SEO, PPC, Social, Display, etc.). You probably won’t get it all here but with any luck your bright new starter should pick up a lot and be able to take over some of these tasks (whichever they show the greatest aptitude for) after a year or so.

Note: if you have this much budget,  front-load the budget and throw the first £10-20k getting in the best in the business from a development AND SEO perspective- measure once, cut twice… measure twice, cut once.

eCommerce

If you already have a well designed user friendly site I would shift that first £10-20k into developing a mobile offering. To ignore such a fast growing market by having a trustworthy and well optimised mobile site and/or app seems a gross oversight that loads of companies seem to be guilty of (still!).

In many cases/respects it seems eCommerce sites (for one reason or another) often struggle more than others to bring PPC and SEO in house. There will no doubt be a number of sites which have done so well, but there are a number that still have not managed this. Plan to spend the majority of the remaining budget working with agencies.

Local Business

Get excited, you should be able to dominate the local SERPs with this kind of budget. Find a great SEO agency with a lot of experience in local. At this point, for a local business, I would look to spend about 50% on SEO as top results for almost all terms would be highly achievable in most local markets. The rest of the spend should likely be spent on mobile, search and geo-location efforts.

Definitely check out Hyper Local offerings from Google on the paid end, and make sure you sign your business up for Foursquare (sorry, I’m an ambassador) as well as GoWalla on the free end of the spectrum.

Brand

This is a much more reasonable spend for a major brand. First order of business should be getting your site under control and making sure your site is Search Engine friendly. Next step is consolidating any branded terms and variations of local branded searches.

One area I see a lot of brands missing out is, yet again, on local. If your brand has physical locations, invest in a trusted agency or full time member of staff to help sort out your individual locations and provide helpful information for your users to make sure they can find you.

Social is immensely daunting but incredibly valuable in branding opportunities, get involved or hire someone you trust to do so.

Lastly, once you’ve got your branded SEO on cruise control (notice, not turned off) you can ease off on bidding on your branded terms. Switch to some high volume terms and up your spend on PPC and display to increase overall online visibility.

 

If you had £100,000 monthly budget how would you spend it…

Right, so this is the point where I’m left with little choice but to cop-out. Every site/market/vertical/product/company is different, I can but offer broad advice here and would definitely need specifics to advise you how to spend £100k a month online for your business. Apologies, but hopefully anyone who is serious about a budget like this can appreciate the lack of a cookie-cutter approach here :)

Start-up/New Site

Congratulations on making your millions in another field or in being great at fundraising. Time to get down to business and get serious. First step is to build an incredible site and enlist the best help you can find. It would be wise to bring in an experienced online marketer as well as an agency to help with the information architecture and nailing the latest in technology. Avoid the overly flashy (no pun intended) websites and get the very best out of the new and emerging web technologies that CAN be parsed properly by Google and are user friendly.

I would strongly suggest building an in-house team starting with a dedicated: Conversion Rate expert, PPC director, SEO Director, Web Developer, Designer, Copywriter and Social Media Manager that you trust. Where necessary bring in outside help on a consultative basis, but having trusted people with you from the start could go a long way.

Set aside a heft budget for linkbuilding, giveaways, press releases and lavish launch parties.

Established Online Business

By this time you should have a best-in-the-business mobile offering as well as online offering. If you don’t see the above advice and develop one. Any excuses, questions or concerns about fixing the broken CMS thingy should go out the window – build a new site and hire a team of consultants to help with the migration. Also, if you’re a brand or an eCommerce site you should start thinking about other markets and making the site available in other languages.

If you’re a brand buy some TV time, buy some display, and spend what’s left on social and developing a personality for your brand. You didn’t get to be a brand with this kind of budget without doing something right.

If you’re a local business you’re laughing and should probably think twice about whether or not this kind of budget is really necessary for your online marketing budget. If it is, use the above methodolgy and scale it up. With this kind of money you should be able to have your pick for most prime real-estate as well so you could always move closer to the city centre for the sake of improving your local rankings and footfall as well.

Try to bring in the best dedicated online team you can and give all of your front-line staff a raise and give some money to charity. Hell, you might even get a link or two.

If you’re an eCommerce site and have this kind of budget you’re probably established and up against the likes of Amazon. If the above advice (have a better website and get involved in mobile) has already been addressed, use some of the budget to offset costs where possible and offer your customers the best possible price that will still make you a profit. Offer over-the-top customer service and more perks than you can shake a stick at. Invest in a social media or community manager. Offer 24 hour support. And set aside a massive linkbuilding spend. Spend generously on PPC with and aim to scale back when you’ve become a brand and/or can outrank those other jokers or afford to be a cheaper option – a savvy searcher will always find a good bargain.

Conclusion

I think the bottom line remains the same across the board – when you get up into the higher levels of spend (i.e. well over £10k a month) I think a lot of brands would be better positioned to invest in their communities, give their users a flexible site that can help them find out more about where to find their product, let them find their shops on mobile, and give users a genuine reason to come back to you again.

I see a lot of brands out there spending £100k a month (guessing here) on display and PPC and no money or time on responding to complaints and helping customers out. It may work for a while, but there will no doubt be a conversation about your brand online, and “teh internetz” is not always the friendliest place. If you’re looking to make the splash in the internet market you’re going to have to connect with your users and treat them with respect even when they’re being unreasonable.

There will always be trolls, but the power of a brand that connects with its users and leverages online communities is unmistakable. If longevity is your game it may be worth thinking about that guy with 50,000 Twitter followers that hang on his every word slagging you off because you didn’t answer his email/call after his bad experience.

At the risk of this sounding a bit too much like I’m advocating my least favourite euphemism “just do it good, yeah?” I will close with this: there is opportunity for any brand in any industry at (almost) any level of spend. You just have to know where to look.

AUTHORED BY:
h

Sam Crocker is SEO Associate Director at OMD UK. Sam focuses on increasing traffic and conversions for websites whilst always keeping his eye on a company’s bottom line.
  • http://justinparks.com Justin Parks

    A massive subject and one of the most important for any business, established or startup. Its something I experience everyday via clients and of course making decisions like that myself and one of the major hurdles at the start is actually establsihing that budget and sticking to it and deciding over what time line you wish to apply it to. (It alwasy seems to disappear much quicker than you hoped or expected!)

    A point I would address is the interns for linkbuilding. In fact, interns for anything in your effort,s should be considered and reconsidered very carefully. They have to learn but putting them in control of something so important makes me nervous and I would alwasy be willing to spend the extra on making sure its done correctly. Of course, if you have interns, then make use of them somehow… like making coffee. ;P

    Also in the smaller budgets, make sure you leverage social media properly as a networking asset. It can be invaluable (its valuable at any level if used correctly of course) but for small budgets, a personal hands on approach combined with the spend can work wonders.

    Now, back to cutting up budgets. :)

    • Sam Crocker

      Thanks for the response Justin! I totally agree in terms of the need for care with linkbuilding interns. Until they learn the ropes you are dead right that this will cost some time in training them up and also teaching them about your brand/company/client and what they stand for. With that said, there’s still a need for low-level linkbuilding and having an extra pair of hands around to help with that (as well as content creation if they are skilled writers) should not be underestimated!

      Definitely like your “smaller budget” tip, definitely a good one.

      Thanks so much for your thoughts!

  • http://trafficcoleman.com/ TrafficColeman

    If you spend money on something, then make sure its seo because that’s something that will last. Just using adverting is short term, you want something long term.

    “Black Seo Guy “Signing Off”

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  • http://www.venderdesdecasa.com/blog/comovendereninternet John Vender en internet

    Thanks for this article Sam. This is easily one of the most useful articles I’ve read this year. In other words the content of the article is all positive and it is a great start of people would get a chance to read this.

    Great work!

    John

  • http://twitter.com/brickmarketing Nick Stamoulis

    The thing is, it really does depend on numerous factors. If possible, spend on a mix of long term and short term strategies. SEO is extremely important, but it won’t show any immediate results. If you have the budget, incorporate some PPC in there as well for the short term until you gain some ground with SEO.

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  • Daniel

    Loved this post, I shared it with all my contacts on linked in and twitter! Hopefully my colleagues in the field will take a look at this, great info and well written. I would like to read more of your posts Sam!