How should you allocate your web strategy budget for 2008?


Update: What better way to kickstart the conversation by using my real voice? Listen in.

It’s planning time, and many of you have submitted your strategies, budgets and resource requests to management, how do I know? Because I get tons of emails, facebook messages, and formal emails at work requesting advice and guidance.

Recently, I posted a question to Ian, who’s the CEO of an internet marketing firm in Seattle:

[What’s the best way to balance a diverse web marketing budget? How should I allocate my funds? How do I prioritize, there are so many tools to consider!]

In his response, He’s broken it down by type of company . Ian lays it down, while some may find it dangerous to suggest how to invest before discussing the business strategy and needs, this is a good starting point for a conversation.

I realize the sensitivity in posting specific numbers on a public blog, so I’d love to hear your process in budgeting (or a best practice). Do you work at an agency? How do you encourage clients to spend with you? On the client side? What are some ways your prioritize?

Update: Mukund (A VP of Marketing) has listed out his budget allocation, wow thanks for the transparency! Interesting that 15% of his resources are to reach people like me in my day job yet 2% is spent on reaching me as a blogger (Social media), so does that mean I would get 17%? I also attend events (industry and social) so there’s other allocations that may cross over to me.

  • Very cool Twitter tool.

    Since my position (Community Manager) and social media is still new to my company, we are still in the experimental stages with free/cheap tools (e.g. blogware, facebook, etc.) to connect with our audience.

    Given this, formal budgeting is taking a back seat to establishing a “social media vision” for the organization. I think that this is extremely important to make sure everyone is on the same page for needs & wants.

    The first half of 2008 is scheduled to harness the successes of ’07 in the most scalable way possible.

    Cheers,

    Mark

  • We’re focusing our budget on social marketing activities with paid search also playing a role. We are also looking at event opportunities in the web 2.0 world to build relationships within the industry and to promote applications of our product. It’s figuring out which events offer the greatest return that I’m trying to sort out now.

  • I agree with Mark about the importance of everyone being on the same page with regards to needs/wants, especially when introducing the company to social media tools for building conversations with customers.

    It’s painful trying to execute a marketing plan without consensus on the allocation of resources.

  • Ian does a great job of giving clear direction.

    My 2c worth: Ian’s approach of breaking out recommendations by ‘type of company’ definitely cuts to the chase, but I’d also recommend validating the channels/tools proposed by Ian against the profile and media consumption of your target audience – especially if you fall into one of Ian’s bigger category headings – ie A Corporation – there’s a lot of diversity inside a group that big.

  • there may be no such thing as a “web strategy” in the end.

    the web is the nervous system, it’s about time the enterprise gets its brains and nervous system together.

    old time strategists will need to acknowledge, integrate and assimilate.

    it’s “strategy”, period.

  • Vruz

    I’ve been told by friends I should have named my blog “Digital Strategy” or even “Media Strategy”. I get your point.

  • I also agree with Ian’s breakdown, by type of company, but would add that the maturity of the marketing model within the company is important. What I’ve experienced with companies that are new to SEM, for example, and are clearly measuring a return, end up scrambling for every dollar they can muster throwing the budget and plan out of whack. (If for every $1 you put in to pay-per-click you effectively get $4-7 in return, you’re going to pull from elsewhere in your budget to make that happen – who wouldn’t?)

    On the flip side, companies that are more advanced may still take gambles that aren’t yet measurable. For example – ticketmaster.com recently launched a sponsored group on facebook with daily updated content, and first n folks who sign up get 5 free iTunes. Big investment, and IMO a gamble, but in a matter of weeks retained an audience nearing 100K.

  • I should have mentioned in full disclosure I work for an interactive agency as well and agree all budget should be allocated to working with agencies to help …

  • …last comment was tongue in cheek… my “cough cough” at the end got removed πŸ™‚

  • I commented with my voice. http://www.utterz.com/~u-NDk2MzY5OA/utt.php i.e. how we got more money for web development at our coffee roasting company.

  • Great Post! Keep up the excellent word.

    Love & Gratitude,
    Tina
    Think Simple. Be Decisive.
    ~ Productivity, Motivation & Happiness

  • Hi all,

    You definitely don’t want to use any rough budget recommendations in a vacuum. Disclaimer here etc. etc. legalese blah blah.

    Ian

  • Hans de Kraker

    first comment on vruz on strategy and the naming thereof. Some of my anchor clients are large corporates in the energy sector. This is a fairly traditional business with peculiar relalities. It is critical to refer to digital or web strategy – otherwise the client audience will not understand. If all you do is web – you can afford to just refer to strategy. If you have a whole of company view and requirements, with a lot of offline activity, like shopping malls, door2door – you have to differentiate between the different strategies and approaches.

    As part of a larger umbrella corporate/social enterprise strategy for our energy client we have developed a social computing strategy (I wish I had a better name for social computing).

    Because this is a real corporate bungy jump and has never been done elsewhere in the world, each innovative tactical execution is evaluated and reverse engineered from persona development and customer experience.

    In the evaluation we use some of the principles of the Forrester Web Site review and that is to test against similar succesful experience/revenue models in different verticals that exist elsewhere and make sure there is no flaw in the experience. Our focus is the customer and experience based differentiation – everything is reverse engineered from that.

    Because the project arguably is an industry innovation that will get a lot of attention- most important part of the planning is really to make sure that when you fall, you can get up quickly and re-adjust your direction. You cannot look around corners. Our utility client is the largest in the industry and cannot afford for this community led innovation project to become a ‘cathedral in the desert’.

  • Walk, stroll then run by asking: “what if you don’t do it.” Walking is when there are a few trying new things. Strolling means a growing group of people doing things, eager to learn and share results. Running means, moving ahead with momentum of many. Invest in the strolling stage and raise ROI when the business is truly running.

  • Most are viewing social media as a separate budget item or part of a general online/digital budget. The power of social media is that it has been successfully applied across marketing disciplines; therefore, it should be a portion of all the major marketing budgets.

    To be a bit more illustrative: Social media is a critical component to PR – both outreach to Bloggers and blogging itself. Our recent survey saw that organizations are increasing investment in podcasts and video blogging for next year. This seems very appropriate for the PR budget. Similarly, promotions and advertising is another natural for social media – a viral widget can spread through Facebook like wildfire (or Zombies), likewise that should be budgeted. Even merchandizing – an online retailer of DVDs can show which horror movies are highest rated by men in the southeast to drive sales– more functionality to budget. Then there is the online budget itself where social media builds and sustains audience and content on the site.