How to Properly Cut Costs in Digital Marketing Without Hurting Your Business Success

There have been thousands of business finance materials created that try to nail down the perfect budget for digital marketing. An entire industry called Financial Tech or simply “FinTech” was born out of this effort. But simply downloading FinTech software to cut costs in business won’t get you over the hump in terms of marketing profitability.

Building a marketing budget and knowing when to cut costs takes patience, experience, and skill, especially for a  small business owner. Below are some tips for building a marketing budget, and knowing when and where to cut costs. We’ll examine how this is done with marketing analytics, and also get specific with some marketing channels like social media marketing, Google Ads, email marketing, and more.

This is the number one concern for clients when we first audit their existing digital marketing efforts. When we ask clients what their ballpark marketing budget is the response we most often receive is “You tell me,” which suggests the client is new to digital marketing. This is ok! We can ask a series of prepared questions to help you build a digital marketing plan and budget based on your goals and current efforts. 

As part of the campaign-building process, we’ll look at digital platforms and channels such as Facebook, Instagram, and Google Ads, to provide a budget estimate and recommended daily spending based on the targeting or keywords we provide. We’ll also look to the geography you want to reach, and sales or lead generation goals. In this way, we can dial in on what it will take to make your digital advertising successful. At Fuze7 Marketing, we’ll talk through what we call Key Performance Indicators (KPIs) so that we can establish benchmark reporting to align your monthly goals with realistic expectations for advertising spend plus agency labor. We then report on this progress monthly so we can better manage costs. To remain fully transparent to clients, we create a shared workspace between our team and yours, most often relying on Google Drive, although there are dozens of other software platforms to help you track our work. 

Each business we encounter has a unique digital marketing budget situation, so it is vital to work with Fuze7 on a marketing budget breakdown while closely tracking spend toward benchmark goals.

When determining a proper digital marketing budget, we often refer to the Classic 4 Ps of marketing to establish our pillars: product, price, place, and promotion. Here is a quick rundown of how to consider each of these for your marketing budget:

• Product: This is commonly referred to as a business’ “at-cost” as in how much it cost to make a product or how much you pay employees to complete a service.
• Price: This is what your customers pay for a product or service. This price point should take labor, advertising, and production of the product into consideration, and be comparable to competitors in your industry. If the math of Return on Investment (ROI) doesn’t equal revenue after 90 days, 6 months, a year, or whatever your timeframe is to keep your business growing, this would be when we’d consider making changes and cutting costs constructively.
• Place: What is the platform or channel where your target customers are most likely to complete a purchase? This is how to know the place where your product or service will thrive. This is why it’s vitally important to go through the exercise of creating target audience segments. 
• Promotion: This is the “how” you market your product, including offers, giveaways, promotional campaigns, ad language, and visual representation.

Through the use of these 4 Ps, a marketing budget will take shape and from this, we can understand how to pare down on marketing costs if ads are not effective. 

To properly set up digital marketing ads efforts, the budgets for Facebook Ads, Google Ads, email marketing, and other channels, as well as labor costs for the marketing team, should be kept within separate planning sheets, but tracked in a central document or financial software for small businesses. Transparent tracking of spend and efficiency helps small businesses avoid getting over-extended.   The marketing budget will be compared to the results of your advertising from a metrics standpoint which we will review to help you identify what levers to pull to make efficiency changes in the process of analytical reporting.

Your marketing budget breakdown will therefore clearly illustrate the 4 Ps above and dive deeper into details like channel-specific spending and results. 

We may be a marketing firm, but we understand that sometimes digital marketing costs need to be trimmed and that scaling, in both directions, is key.There is such a thing as overspending because you experience some initial success. There is also an effective way to scale back on ad spending and marketing budget without completely cutting off your potential revenue streams. Both practices involve math and calculations that help you get back into the black.. For example, if you are running Google Ads and not seeing much success, when was the last time you ran an SEO diagnostic for your website to check on your organic traffic potential? If you’re working with Fuze7, this is something we do from the beginning because if you’re running Facebook and Google Ads without having a website ready for sales or lead generation and site traffic, you’ll be wasting your money on advertising. 

If you are not familiar with SEO, you are not alone, but it is a critical piece of marketing success. SEO is certainly a long-term play, but you can greatly offset your long-term Google Ads costs  by utilizing SEO tactics to organically drive traffic to your site instead of having to pay to reach the first SERP (Search Engine Results Page) above your competitors. In SEO, you’ll still have labor costs to pay the professionals to set up your website for future success, but in the long run, you’ll save on ad expenses.

Another way to constructively cut costs is to remove ad targeting that has been deemed ineffective, rather than ceasing efforts outright or removing ad budget. Any marketing team you work with should be able to gather insights about the audience you are targeting while eliminating the segments that aren’t producing results. Sometimes cutting costs means optimizing campaigns to improve your bottom line.

A final bit of advice is to seek out places to learn about digital marketing. A marketing firm can explain complex marketing tactics, but it is always wise to spend a little of your own time learning the best means to get your company noticed.

No matter what your digital marketing goals are for 2023 and beyond, Fuze7 Marketing can create custom growth, sales, and leads plans for your business! If you need a comprehensive strategy for leveraging digital marketing trends in 2023 drop an email to info@fuze7.com or give us a call at (503) 830-0355.