Marketing Budget Allocation: How to Best Spend Your Startup’s Limited Dollars
Find out where to allocate your budget in order to grow your startup faster this year.
Every year, major brands spend a lot of money to market their products and services. According to Ad Age, total U.S. ad spends for the top 200 advertisers reached an astounding $137.8 billion in 2014.
That's not just traditional media placement, either. Companies are spending a lot of time and money to transition more of their marketing efforts to digital promotion.
"We're shifting more advertising to digital media, search, social, video and mobile as consumers spend more time there," says Jon Moeller, Procter & Gamble CFO. "In general, digital media delivers a higher return on investment than TV or print."
Luckily, you don't need to compete on that level when marketing your startup. Many of those major brands aren't running ad campaigns to expand their reach. Instead, their efforts are geared more toward branding in hopes of keeping their product, service, or brand at the front of a customer's mind.
Think about it: We all know what an Oreo cookie is. It would be hard to find someone who has never seen or heard of Oreos--yet the company committed $23 million to promoting the brand in the first 9 months of 2014.
You won't have to spend that kind of money to get in front of new audience segments. In fact, you can run an effective campaign for thousands--or maybe even less. It all comes down to smart time management and a strategic use of your limited budget.
Research Costs You Nothing
Before you spend a dime on advertising, take the time to research your audience. It's the most important part of your marketing strategy, and it comes before the development of any campaign.
Without research, you'll never know where to focus your marketing efforts. You'll end up with a poor return, regardless of whether you spend $1,000 or $100,000.
Research takes a lot of forms and should include, at minimum, the following:
- Identifying your target audience
- Audience segmentation (how different members of your audience should or could be targeted)
- Competitive analysis
- Customer surveys
- Customer online browsing habits
- Audience preferences (what they read, listen to, or watch)
- The types of media your audience prefers
- Audience pain points in relation to your product or service
This research serves as the foundation for every campaign you create for pre- and post-launch efforts.
I'll admit there are ways to spend money on research, like buying data reports for your audience or industry. But this isn't always necessary, since just about everything you need to get off the ground can be found online for free.
There's no shortage of tools that are flashy, attractive, and designed to help you grow and market your business. You don't need a ton of new tools in your kit to get the job done, though; you just need a few that work exceptionally well--like email marketing.
According to McKinsey research, email is 40x more effective for new customer acquisition than Facebook or Twitter. Seventy-two percent of existing customers actually prefer to receive promotional content through email, compared to just 17% who prefer social media.
Email lists are pure gold. This is a collective group of customers who opt-in and are interested in what you offer and what you have to say. For a couple hundred dollars, you can get a one year subscription to a service like MailChimp or Drip. Depending on the email automation platform, the cost can vary depending on list size and the number of emails you send.
If you don't like the templates offered, you can hire a freelancer to create an elegantly branded email template to make your emails more attractive and engaging.
Social Media Promotion
Your research will tell you which social platforms are best to engage your audience. Focus on one or two that offer the most impact.
Once you identify the social channels, start promoting your best content with paid ads and post promotion. You can do this on Facebook even with a relatively low budget. With Twitter Cards, Facebook promotions, and boosted posts on LinkedIn, you can reach a highly-targeted audience for as little as a few hundred dollars spread across several campaigns.
You can reach thousands of people to drive opt-ins, page likes, website traffic, and more.
Content marketing costs little more than time if you're a capable writer. If you're strapped for time or you're not comfortable writing, you can hire a freelancer. In most cases, you'll pay per post. That's a one-time payment for content that will continue to bring targeted traffic as long as it's online.
In 2011, Monetate, a provider of testing, targeting, and personalization solutions for websites, launched a three-person content team to create three to five posts per week along with infographics, whitepapers, and webinars. Within six months, the traffic to the site increased 255% while unique visits increased 353%. As a result, it doubled the number of sales opportunities.
"Everyone believes the story we want to tell is not about Monetate, but the value in website testing and optimization, dynamic content delivery, and helping our customers create the most relevant digital customer experience possible," said Monetate's Content Marketing Director Rob Yoegel, in an interview with Top Rank.
Your content won't go very far if you're not promoting it. Manual promotion can be a huge time suck, so it's not something I recommend--even if you have a vast network. Instead, outsource your promotion.Hire a content promotion specialist to help push the content to relevant sources.
I also recommend using a few tools to help with content promotion. Quuu is a platform marketers use to find curated content. Also, my tool Notifier, is a great way to find and leverage influencers to expand the reach of your content.
Lastly, use Buffer to schedule your content across various social channels so it's going live when your audience is most likely to see it and engage with it. These combined methods can be leveraged for less than just a few hundred per month.