Cutting Digital Marketing Spend

Every business faces challenging times that necessitate reevaluating expenditures and strategies to ensure survival. In marketing, the key to thriving is understanding what to trim and maintain. This requires a comprehensive understanding of your marketing spend and the returns it generates. With strategic cuts and budget reallocation, you can enhance engagement with existing and potential customers, driving growth even in tough times.

However, it’s crucial to remember that not all budget cuts yield positive results. For instance, during the 1990-1991 recession, McDonald’s decided to cut advertising and promotion costs, while Taco Bell and Pizza Hut maintained their marketing budgets. The result? Post-recession, the latter two saw double-digit growth in sales, while McDonald’s experienced a decline. This illustrates that simply slashing your budget won’t necessarily mitigate losses. Instead, it’s about identifying areas of overspending and underspending and adjusting your budget allocations to align with your goals.

Now, let’s delve into why maintaining your digital marketing spend during challenging times is essential and how you can trim your marketing spend without harming your business.

Why Maintaining Digital Marketing Spend is Crucial During Tough Times

Challenging times often trigger a ‘reaction mode’ in businesses, dealing with issues like falling profits, customer acquisition problems, supply line interruptions, and pressure to turn things around. Modern digital marketing tactics are more efficient than ever, meaning you can implement them on a small budget and still see gains. During challenging times, trends such as online shopping can surge, making it vital to keep your marketing ad spend operational and optimal to ensure survival until the economy recovers.

Here are some changes to consider that don’t involve gutting the entire budget:

• Evaluate and maintain your ad spend after identifying non-optimal resource use.
• Lean towards creating appealing content to reach customers effectively. Our Content Writing & Content Marketing Services can help you with this.
• Invest more resources in retaining existing customers to keep competition at bay.
• Focus your campaigns to reach smaller markets with relevant and timely messages, as they are usually hardest hit in a recession.

With the right mix of content, social media, SEO, inbound, PPC, and retention marketing, you can keep your presence active until things pick up.

How to Trim Digital Marketing Spend Without Hurting Your Business

A 2020 Spend Survey by Gartner found that despite many spending cuts, furloughed workers, and shuttered offices, budgets for marketing technology and digital channels continue to grow. The reason is simple: digital marketing is the most effective way of reaching potential and existing customers.

To review and fix your current budget, you must evaluate all the operation and non-operation marketing resources allocated to customer acquisition and retention. After identifying areas for repurposing or cutting based on efficiency and established budgeting facts, you can then:

• Make simple cuts where necessary using analytics tools to identify low producers.
• Focus on funding quality marketing strategies instead of trying multiple strategies to see what works. Our Graphic Design team can help you create visually appealing and effective strategies.
• Stay updated with market trends, news, conventions, official data resources, and technologies to stay ahead of the competition.
• Enhance the profile of your ideal buyer and update your marketing data to ensure you’re pointed in the right direction.
• Leverage the free aspects of social media to your advantage. Strategic and compelling posts with relevant hashtags can attract more customers to your content. Our Social Media Marketing services can assist you with this.

After identifying what you can incorporate, the next step is to draft a budget for your future with performance in mind.

Crafting Your Future Budget Based on Key Performance Indicators (KPIs)

Digital marketing spend should be guided by well-defined KPIs that track performance. Some of the KPIs directly correlated to the number of resources you allocate to key areas of the budget include:

• Revenue per visitor (RPV): This KPI directly shows which marketing budgeting decisions lead to money. The higher the number, the more your ROI climbs.
• Conversion rate: This KPI measures the number of customers who complete a purchase or a process you take them through.
• Customer acquisition cost: This KPI measures how much you spend to get a customer. The goal is to lower the cost as much as possible without hurting your conversion rate or other metrics.

One of the most important KPIs is the Customer Lifetime Value (LTV), which predicts which customers offer you the most value throughout their relationship with your business. However, measuring LTV is not simple; only about 40% of companies can do it. The only way to do it is by collecting information about your customers and using it to create a predictive model that can extract and extrapolate data to predict customer behaviour.

Moving Forward with Your Optimized Budget

Let facts and data guide you as you optimize your budget. Your money is too important for guesswork or blindly cutting off resources. To avoid losing your way, consider outlining all the digital marketing strategies you have in action, their benefits, and which ones are not performing well enough to warrant additional funds.

Employing specialists who better understand marketing and KPIs can give you a quick and well-calculated start. They can lay out the right strategy for you, execute it, and when running smoothly, can pass the reigns back to you if you’d like. You can contact us to book your FREE Strategy Consultation Call Today.

To start you off on this journey, remember to remember these top tips on planning for recessions. We are confident that with proper spending reduction, you will see benefits not visible to your business until now.

Don’t know where to start? Get in touch today.