ROI and budgeting
Digital marketing should be treated like any other distribution channel in your business. You need to understand its potential and place a value on each initiative. Understanding your online ROI (Return On Investment) expectations can help you prioritise funding or reduce it if better opportunities exist offline.
Defining your digital budget based on how much money you have to spend is a common mistake. A good budget is one based on producing an acceptable online ROI. Having understood your objectives you can now begin to place a value on success. Knowing what income ‘potential’ your digital strategy has will help you build a business case for budgets. For some businesses this will mean seeking more funds than originally allocated, but for others it is about reducing the budget. Either way it is about your digital spend being directly linked to an expected ROI.