The approach to setting budgets for digital campaigns differs between a startup online store and an established one with accumulated audiences and customer base. When you’re a startup store – the beginning is more challenging. This period requires the most patience and persistence to achieve the set goals.
Most online merchants believe that the main investment to start an online business is in the platform and securing inventory. This is largely true, but without informing your customers about your online store’s existence and the quality of your products/services, you cannot expect to achieve sales. For this reason, effective investment in digital campaigns and communication as a whole are critically important for attracting customers.
Well, this is exactly what we’ll tell you about in this article today.
Where should you start when structuring digital campaigns for an online store?
Start by Defining the Objectives for Digital Campaigns
Define what you want to achieve with your digital campaign. Properly defining goals and expectations will be fundamental to structuring campaigns and budget.
There are several options for setting goals:
- increasing awareness and engagement with the brand(s) you sell in the store;
- attracting quality traffic to the site;
- increasing sales;
- generating repeat sales.
If no one has heard of you, start by attracting the attention of your potential customers, get them to visit your page and browse products.
Define your Audience for Digital Campaigns
Start by researching your target market. Understand their demographics, interests, and problems they face when using your products. Get out of the office – if your products are sold in physical stores, take time to observe who buys them, try to talk to them. This information will help you create buyer personas, who will be your “ideal buyers.” Analyze your current customers and those who follow and engage with your social media content and compare them with the “Ideal Buyers.” What are the similarities and differences?
Well, now you surely have a very precise portrait of your target audience.
Observe your competitors too. Analyze their audience. Who are they targeting and how do they reach them, which channels do they use? This can point you toward potential audience segments you might have overlooked.
Choose the Right Channel and Campaign Type
Research and identify the most effective channels for promoting your online store. To make the right decision, you need to know which channels and campaign types work for which part of the funnel. Here are some general guidelines:
Meta Ads – depending on the campaign type, work in the top, middle, and bottom of the funnel.
Meta remarketing ads – middle and bottom of the funnel.
Sponsored posts on Meta – top of the funnel.
Blog articles – in the middle of the funnel.
Google Discover Ads – mainly top of the funnel.
Google Display Ads – mainly work for top of the funnel. When used for dynamic remarketing, they can work for bottom of the funnel.
Google Search – mainly for middle and bottom of the funnel.
YouTube – mainly in top of the funnel for reaching new people. But can be used for bottom of the funnel – if you create customized video ads for retargeting.
Google Ads Gmail.com – mainly in bottom of the funnel.
Google Ads Maps – mainly in middle and bottom of the funnel.
Google Organic Search – mainly in middle and bottom of the funnel.
And so, We Come to Determining the Budget for Digital Campaigns for an Online Store
Usually, the budget is determined as a percentage of your revenue from online (or online and offline in some cases) sales. It varies from 10-30% depending on:
- the margin you have when selling goods;
- the stage of development and establishment of the online store;
- the investment made by competition in your industry.
If you’re just starting to establish your online store, you should prepare for a larger investment. Our experience shows that for at least one year after launching the store, you should be ready to reinvest your profit in communication or even invest more than that. See how much and in which channels your competitors invest. If they have more experience than you, they’ve surely walked in your shoes and eliminated some of the problems you’re facing. Other factors that influence the investment volume are sales seasonality and the size of your target audience.
Track the Effectiveness of Digital Campaigns
Monitor the effectiveness of your campaigns in Google and Meta channels. Use key performance indicators (KPIs) such as click-through rate (CTR), conversion rate, and return on ad spend (ROAS) to evaluate the effectiveness of your advertising efforts. One of the key indicators we monitor during campaign execution is the return on advertising investment. We’ll discuss how to determine it and when it becomes effective in one of our upcoming publications.
Optimize Strategy for more Effective Digital Campaigns
Based on performance data, adjust your strategy to improve campaign effectiveness. Allocate more budget to the channel that generates better results, and optimize your advertising messages and targeting to improve overall campaign effectiveness. For example, if you have many customer questions about a product’s price, despite including it in the ad, there’s clearly a problem with understanding or visibility. Don’t ignore it!
Duration of Digital Campaigns
The duration of your campaign should be based on your goals and the nature of your products or services. As a general rule, a campaign should last at least a month to allow sufficient data collection and platform optimization to begin. However, some campaigns may require longer duration, especially if they’re seasonal or involve high-value products. If your campaign is giving good results – don’t stop it, regardless of predetermined deadlines. Do everything possible to understand what factors make it so successful.
