How to Split Your Online and Offline Marketing Budgets For Better Results

Even so, online marketing has far surpassed offline marketing in its return on investment as well as its low cost of entry. CNBC reports that research by the media agency Magna estimates that by 2020, online advertising spending will likely equal offline spending. Digital advertising holds massive sway over public perception of a brand and gives advertisers new tools to use in getting their message out to the world.

Even so, online advertising isn’t the only medium people look to for products. Ad Week mentions that consumer trust in social media is waning and a lot of businesses have a large portion of their advertising budget on the line. Most older people tend to avoid social media altogether, and offline advertising focuses mostly on this demographic. Even the little neon sign has its place in promoting brand awareness and filling the needs of offline advertisers. Appropriating budgets for each type of advertising can have significant and lasting impacts on both brand visibility and overall bottom line.

The Distinct Differences between Offline and Online Advertising

Before one delves into which type of advertising is better for what purpose, one must first understand the differences that exist between them. Online marketing, as the name suggests, is primarily done on the internet. Among the elements that this type of marketing offers to brands are social media, paid search (PPC), content marketing/blogging, electronic mailing lists, and search engine optimization.

Conversely, offline marketing leverages anything that doesn’t use the internet to get a brand’s message in front of customers. Among the elements that make up offline advertising are radio and TV ads, direct mail or flyers, posters, billboards, and trade show displays. All of these are lower tech and have a much higher cost to their implementation can online marketing means. They can also be less effective, depending on the demographic the product deals with.

Now that one understands how offline advertising differs from its online counterpart, one can approach the question of assigning budgets to each.

Determining Spending for Advertising

HubSpot mentions that more than a quarter of marketers see not having enough budget for their advertising needs as a challenge in 2017. Sadly, both types of advertising need capital to see returns. How does one go about determining, therefore, what money should go where?

STEP 1: Calculate Total Budget

Before a company can decide where its marketing budget goes, it needs to know what sort of money it has to work with. The figure doesn’t have to be an annual budget – planning can be done using quarterly or monthly numbers if needs be. Entrepreneur offers a helpful rule-of-thumb for companies looking to determine a ballpark figure for their advertising budget:

• Companies that have been in business for one to five years (“new” companies) should dedicate anywhere between 12% and 20% of their projected or gross revenue for marketing purposes.
• More established companies which already have a market share can get by with between 6% and 12% of their projected or gross revenue for marketing implementation.

A budget that takes overall gross revenue into account hedges things in the company’s favor, so that they don’t need to worry about advertising over expenditure.

STEP 2: Implement a Marketing Plan

Regardless of if a company intends to invest in online or offline marketing, they still need to follow a plan to succeed. To do this, the company should focus on what they intend to achieve, how much they have available to spend, and what sort of demographic they will be targeting. These key points can help to narrow down marketing strategies. Companies that focus on an older audience, for example, will likely not want to spend too much money on social media marketing since they will miss out on hitting their target demographic.

STEP 3: Divide the Budget

Once the business has determined where the marketing plan is targeting, it can then start assigning budgetary allocations to where would benefit from it the most. If the company’s marketing plan focuses on driving online sales and deals with a younger audience, then the bulk of the budget would go towards online advertising. If, however, the company aims at a more traditional audience, then, thanks to the increased cost of offline advertising, the lion’s share would be distributed for that.

STEP 4: Test Budget Needs and Adjust the Allocation if Necessary

Advertising is an inexact science, like all fields that deal with people, and requires a lot of tuning to work out the ideal figures. Businesses that find that they don’t have a handle on how to distribute their marketing budget the first time they do it shouldn’t worry unnecessarily. With each successive period, the aim should be to improve the budgeting process and adjust the split so that more money goes where it needs to go.

To effectively perform this, a business should set the budget in place for a period, then at the end of that time explore the ROI of each advertising method and adjust the figures to offer a higher budget to the better performing techniques. Switching budgets during this period is recommended since it can help a business find the balance in their marketing tactics and help them utilize their budget more effectively.

Both Types of Advertising Are Important

Both online and offline advertising have their place in modern business. Companies that focus too much on one and neglect the other create a situation where they lose out on brand recognition simply because they misread the market. Applying the advertising budget to both is a necessity in 2019, and knowing where a business dedicates its advertising budget could make or break their bottom line. It’s a long process, but well worth the effort.