E-commerce marketing, also referred to as online marketing or digital marketing, is a marketing method that involves the use of digital tools and platforms to reach consumers.

With e-commerce marketing, you are able to target audiences based on sex, age, location, and several other demographic factors. You can also track the success of your campaigns and set up automated reminders to help you keep up with constant marketing.

The Growing Importance of E-commerce Marketing

What was once a supplementary activity is now a mainstay of marketing. While many companies still rely on traditional methods of marketing, such as television ads, magazine spreads, and billboards, e-commerce marketing has taken over. In 2020 alone, retail e-commerce sales were worth approximately US$14 trillion.

Retail e-commerce sales in the United States in 2020. Source: Statista.

Retail e-commerce sales in the United States in 2020. Source: Statista.

One of the major reasons why e-commerce marketing has seen such significant growth is due to the increasing influence of digital marketing and social media. In 2020, 68% of American adults used social media platforms to learn about issues, while 55% used them to research products or brands.

Additionally, 40% of American adults reported that they used digital marketing to learn about brands, products, or services, compared to just 10% who used traditional marketing methods, like television ads or magazine spreads.

Why Should You Budget For E-commerce Marketing?

Budgets are always a concern, but it’s an even bigger concern when you’re discussing a matter as critical as your marketing budget. Why should you budget for e-commerce marketing, you might ask?

The simple answer is: you shouldn’t. Your marketing budget should be tailored to meet your specific needs, but in a world of limited resources, you have to prioritize your expenditures. The good news is that you can use data mining & machine learning to optimize your e-commerce marketing budget and ensure that you’re getting the most from your investment.

Data Mining

Data mining allows you to search through large amounts of data and discover valuable information about your customers that you can use to better serve them. By diving into the massive amounts of anonymized customer data that digital marketing platforms provide, you can discover every detail there is to know about your customers’ demographics, interests, and behavioral patterns.

This data is invaluable to helping you determine how to best market to them. You can use the information to tailor your offers as well as track the success of your campaigns and find areas where you can improve. For example, if you learn that your most engaged audience is made up of female millennials with a strong interest in health and wellness, you can develop content that is specifically tailored to meet this audience’s needs.

Machine Learning

Machine learning allows computers to carry out tasks that humans can perform. For example, if you have a lot of data to analyze, you can train a computer to do the work for you. With machine learning, you don’t need to have any specific expertise, as the software learns from examples you provide it.

This is why it’s so important to fully utilize the capabilities of the digital marketing platforms that you use. These platforms can learn from previous marketing efforts and perform tasks like analyzing traffic, identifying trending topics, and measuring the success of your campaigns that you couldn’t do yourself. Additionally, you can take advantage of their advanced segmentation and targeting capabilities to target the right audience, based on their interests, behaviors, and demographics. For example, if you own a café and want to attract millennial customers, you can set up a campaign that targets people based on their interests in food and drink, with an emphasis on the word drink. In doing so, you can expose them to special offers for café-related items, like mug cakes, t-shirts, and hoodies.

Optimizing your e-commerce marketing budget has never been easier. You don’t need to be a technologist to carry out the steps listed below. Simply follow the guide and you’ll be able to reallocate your marketing funds to the most effective strategies in no time.

Steps To Reallocating Your Marketing Budget

To get started, you will need to ask yourself the following questions:

1. What is my current marketing budget?

The first step is to take a look at your current marketing budget. This is the amount of money that you’re currently spending on marketing activities, like paid ads, email marketing, and website development.

You should have a clear idea of how much you’re currently spending on marketing, as this is the amount of money that you’re committing to. If you’re looking for ways to reduce your costs, you can begin by analyzing your current expenditures and identifying areas where you can optimize. You don’t want to cut corners and end up using sub-par services or struggling to keep up with the demands of a growing company.

2. How much should I budget for e-commerce marketing?

The second step is to determine how much you should budget for e-commerce marketing. To do this, you will need to consider a few key points, including your product categories, the size of your market, and your budget. To give you a better idea of how much you should budget for e-commerce marketing, let’s examine each of these points.

Product Categories

When deciding how much you should budget for e-commerce marketing, you should consider the product categories that you’re currently focusing on. For instance, if you’re currently producing and selling beauty products, you might want to consider investing in beauty e-commerce marketing. However, if you’re currently exploring the digital world and want to attract customers from around the world, you can consider investing in global e-commerce marketing.

You should look at the total market size of your product categories. Simply put, the total market size is the total number of people who are potentially interested in your product categories. This is typically obtained by adding up the sales figures for all the products within your categories.

The good news is that you can use tools, like Google Analytics, to track the total market size for your product categories, as well as the growth of individual products. Using this data, you can find out which product categories are performing the best and determine if you should continue investing in these categories or change gears and explore new ones.

Market Size

The next step is to determine your market size. Your market size is the total number of people (customers) who are potentially interested in your products. Simply put, if you’re selling food products, the market size is the total number of people who are potentially interested in food products.

Deciding your market size is not an easy task. You have to consider your target audience, which you can derive from your demographics, as well as your geographic location. Additionally, you will want to take into account the type of customers you have now, as well as the type of customers you will want to attract.

The good news is that you can use digital marketing tools, like Mailchimp, to determine your market size. Simply include your email address in the sign-up field of your account and you’ll start receiving emails from Mailchimp, which will contain important information about your target audience, as well as tips for converting website visitors into paying customers.

Budget

The last step is to determine your budget. Your budget is the amount of money you have available to spend on marketing efforts. To determine how much you can spend, you will need to take into account several factors, including your financial situation and what expenses you can afford. If you’re looking for ways to lower your costs, you can begin by analyzing your current expenditures and identifying areas where you can optimize. You don’t want to cut corners and end up using sub-par services or struggling to keep up with the demands of a growing company.

What are your thoughts on marketing budgets and what should you spend your money on? Let us know in the comments below.