How to Make the Most of Your 2016 Digital Ad Spend Part 1

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During the first quarter of 2015, marketing experts predicted over $60 million would be spent on B2B digital marketing campaigns this year. Outsell’s 2015 Advertising and Marketing Study concluded that B2B digital marketing will almost double all other B2B spending combined. Large budgets are a marketer’s dream, but we all know that at the end of the day, there’s got to be positive ROI.

There are so many options available to marketers to deploy for that next big campaign. Most marketers have go-to strategies like social and mobile ads, email campaigns or ad retargeting. With long sales cycle and fierce competition, B2B marketers don’t always have the freedom or confidence to experiment with unproven strategies, particularly if it means potentially undermining the flow of traffic into and out of the sales funnel.

In this two-part series, we will analyze industry spending trends to uncover more opportunities to improve prospecting and increase conversions as we look toward our 2016 budgets.

What are other B2B marketers spending online?

Back in school, it was forbidden to look at your classmate’s answers on a test. As a marketer, it’s a smart move to look at what companies that are similar to yours in size and revenue may be allocating for their marketing efforts. There are plenty of examples of companies that have risen to the top by allocating a staggeringly high percentage of their overall revenue to marketing. But there are also an equal number of case studies in which businesses have attempted this bold strategy and sustained staggering losses.

Perhaps the most common way to plan your budget is to look to your company’s annual revenue. If you have enough historical data, you can easily finesse the details of your marketing-budget-to-overall-revenue ratio. An analysis of marketing budgets revealed distinct differences in average investment levels based on annual revenue. Companies with less than $25 million in revenue allocated 13.9 percent of their revenue to marketing. Companies with $25 million – $99 million spent 6.1 percent.

If the historical data doesn’t provide a clear path to plan your budget, a 2014 CMO Survey report may offer a simpler approach. According to the report, the type of business determines the marketing budget. The percentage of revenue allocated for the digital marketing spend for a B2B product business is 10.6 percent, while the B2B service business is slightly less at 10.1 percent.

With this information in mind, it may be easier to put your company’s marketing investment into perspective. In general, smaller businesses are devoting a larger portion of their revenue to digital spending than their larger, more established companies.

What size budget should I prepare for 2016?

Revenue considerations aside, it is important to be fully aware of industry-wide investment trends in digital spending. After all, if your competitors are preparing to expand their investment in digital marketing beyond proportional levels exhibited in previous years, this could significantly affect your own ROI.

According to IDC, over $67 billion will be spent on online advertising by U.S. companies in 2016 compared to $35.5 billion spent in 2011. This is a compounded annual growth rate of 13.7% for digital spending.

There’s just no easy way to determine if your marketing budget should reflect the phenomenal increases in U.S. digital ad spending. ROI is the ultimate factor and will determine if your marketing investment is sustainable. But as we know, ROI is determined by far more than merely how much money is funneled into marketing.

What should I focus on more: mobile advertising or social media advertising?

This is a trick question because the most effective B2B marketers will invest in mobile and social advertising. Savvy marketers are prepared to embrace certain platforms while rejecting others, but in order to reap the maximum possible benefits, your efforts should be tied to the needs of your audience and the results you’re looking to yield.

Marketers will test various social media platforms for the highest visibility and engagement with their audience before investing heavily in one platform over another. LinkedIn remains a clear standout for connecting B2B marketers with serious buyers. This doesn’t necessarily mean you should scrap any plans you had for Facebook or Twitter. You know where your audience hangs out so plan to be where they are. Another consideration for social advertising is the resources offered by each platform. For example, LinkedIn offers sponsored updates as a strong perk.

Have you gained both a micro and macro-level awareness of social media advertising and mobile advertising? In order to make educated and effective decisions regarding your upcoming ad investment, it may be worth taking the time to delve deep into these areas to learn more about potential customer engagement opportunities.

In Part Two, we will dig deeper into the heart of digital ad spending by helping you identify and realize the true potential of your digital investments. Stay tuned!

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