Step-by-Step Guide:Optimize Your eCommerce

Marketing Budget

STEP 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 those campaigns.

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Proving marketing ROI and allocating budgets are two of the biggest challenges faced by marketers across all industry verticals in eCommerce. Setting proper marketing budget is crucial to the success of your marketing campaigns. And attributing the ROI to the right marketing activities is vital in understanding where to invest that budget.

Step-by-Step Guide: Optimize Your eCommerce Marketing Budget

Some of the most common goals for eCommerce companies are:

Improve customer loyalty

Drive website traffic

Increase online sales

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.”

1) Make objectives as specific and time-bound as possible.

For example,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.

3) Create objectives based on the current needs of your business

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.

4) Establish goals that can be tracked and measured

Keep in Mind

There are several things you have to keep in mind regardless of the objective you select.

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Goals Set: With your goals set, you’re ready to formulate your marketing strategy and allocate your eCommerce marketing budget.

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.

2) Set realistic goals and avoid wishful thinking.

STEP 2

Develop 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.

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.

You can choose from a variety of marketing techniques:

1. Content Marketing

2. Pay-Per-Click (PPC) Campaigns

3. Email Marketing

4. Influencer Marketing

5. Traditional Marketing

A pro trip would be to use the techniques listed above in combination to develop your eCommerce marketing campaign.

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Pro TIp: Combine marketing techniques to develop your eCommerce marketing campaign.

STEP 3

Allocate a Budget for Various Marketing Activites

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.

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Total marketing budgets are between

of total revenue.7% 12% &

Less Mature Budgeting Methods

Total 47%

PrepetualBudgeting

5%

RollingBudgeting

19%

IncrementalBudgeting

23%

Zero-BasedBudgeting

4%

Ad-HocBudgeting

12%

Activity-BasedBudgeting

37%

More Mature Budgeting Methods

Total 53%

A more effective approach to optimize your eCommerce marketing budget to achieve maximum ROI would be to follow 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.

If your business is new and you don’t have past data to allocate your eCommerce marketing budget, benchmark against competitors to use this technique. Find out what activities other marketers are spending on most and allocate your eCommerce marketing budget accordingly.

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Benchmark against your competitors marketing activities. Check out where they spend and allocate your budget accordingly

NEW BUSINESS WITH NO PAST DATA?

STEP 3

Allocate a Budget for Various Marketing Activites

According to a Gartner survey , CMOs invest part of their marketing budgets on a variety of activities:

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CMO BudgetPercentage going to people and programs

MARKETING TECHNOLOGY is one of the largest areas of investment when it comes to marketing resources and programs.

Labor

27

2423 23

29

25 25

22

2017 2018

Paid Media Agencies Martech

Now that you have a list of marketing activities, with individual budget allocations for each. 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. Which is why it’s important to clearly define processes of measuring results from each activity.

For example, let’s say that your revenue grew by X amount in one year. Which is great, but 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.

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ONE OF THE BIGGEST CHALLENGES in measuring eCommerce marketing ROI is attributing results to the different marketing activities in your strategy

STEP 4

Define KPIs and Establish a Process to Measure ROI

1. 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

2. Influencer marketing: Use an influencer management platform to easily track and measure the campaign performance and ROI.

3. SEO campaigns: Use Google Analytics to measure the ROI of your SEO campaigns.Sine common KPIs include:

Organic sessions Keyword rankings Leads/conversions Bounce rate

4. Social media marketing: Use social platform analytics to review 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 using UTM links.

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

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 in place, set it up now.

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There’s one more trick up our sleeves to help you take your ecommerce marketing budget one step further, to get even better ROI.

Are you ready for it?!

Target your ideal audience for your brand. I know it is something that every marketer knows and one of the first things taught in marketing schools. This simple step is often overlooked. 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.

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.Use this guide to help you get the best out of your eCommerce marketing budget and excel at digital marketing.

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The average conversion rate for eCommerce

websites.

Average order per purchase in online

stores.

How much a US customer spends shopping online

weekly.

1.6% $139 5 hrs

STEP 5

Take Your eCommerce Marketing Further for Maximum ROI

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