Don’t Fudge It on Budget: 8 Pro Tips for Planning Your Store’s 2022 Marketing Spend
December 7, 2021
Reading Time: 6 minutes
While visions of sugar plums dance in the heads of children nestled snug in their beds, ecommerce merchants across the world are dreaming of something else sweet this holiday season: a perfectly crafted 2022 marketing budget.
With so many avenues to reach customers and prospects—and so much competition from other merchants—you can’t afford to wing it and hope for results. So, as budgeting season gets into full swing, we tapped Kara Morin—former Director of Marketing at RAREFORM and current customer success extraordinaire here at Postscript—to share firsthand wisdom on how to create the best possible marketing budget for your brand.
Here’s what she learned over the course of her six-plus years heading up the marketing department for a successful online store.
1. Create buckets based on type of spend.
Not all marketing dollars are created equal—which means your spending strategy should vary based on type of expenditure. You can get really granular with this, but Morin preferred a more simplistic approach.
She divided RAREFORM’s marketing budget into three featureImage: ''
Read on to learn more about her strategy for each.
2. Let ROAS drive your budget for channels.
For marketing purposes, channels include all the places where you see a direct correlation of spend to sales—Google ads, Facebook and Instagram ads, partnerships, and the like. For these line items, Morin says, your budget should “be based less on a hard dollar value, and more on whether you’re achieving the returns you want.”
As long as you’re seeing a healthy return on ad spend (ROAS) for a particular channel, there’s no need to cap your investment. After all, in Morin’s words, “What’s $500 if it’s going to make you $100,000?”
3. Scrutinize your tech stack to make sure you’re not overspending on tools.
Software fees—for things like your website platform, your returns provider, and any conversion optimization tools—are tougher to measure against sales impact. So, Morin recommends auditing them each year to determine whether there are any redundancies or opportunities to swap in less expensive alternatives (if you’re not using all the features of a particularly expensive tool, for example).
In some cases, you may be able to create manual workarounds that eliminate the need for software. “If I could customize something myself and save a lot of money, even if it cost me some time, I would do that,” Morin says of her time at RAREFORM. “I ended up building a lot of custom solutions because what was out there was not worth the money.”
On the other hand, she often kept solutions that—while not truly essential—had an undeniable impact on revenue. “For example, if I was spending money on something to improve site speed, that’s definitely improving conversions—but it’s not like Facebook where one dollar in equals X dollars out,” she said.
4. Invest in assets you can use again and again.
The asset bucket includes all the costs that go into producing marketing and ad creative for your brand—things like modeling talent, photography, videography, graphic design, studio time, and props. In the same way that it makes economic sense to spend more on versatile, high-quality wardrobe items you can wear for almost any occasion, it’s always a good idea to plan asset production in a way that enables you to reuse, recycle, and repurpose assets throughout the year.
“If you’re already paying for a photoshoot, why not bring in a videographer and get still photo content and video content at the same time?” Morin said. “You always want to be as economical as possible.”
5. Beware of copying and pasting last year’s budget sheet.
A lot can change from one year to the next, so resist the temptation to simply re-use last year’s marketing budget. Even if you adjust the dollar amounts, you need to think critically about industry changes that have impacted—or will impact—the effectiveness of each individual strategy.
“In 2021 we saw two huge changes to iOS—one that really impacted third-party marketing channels like Facebook, and another that impacted email,” Morin said. “The ROAS that would make those channels profitable [for RAREFORM] changed, which meant we couldn’t guarantee that a certain percentage of sales would come from those channels.”
So, if she were still at RAREFORM, Morin would likely adjust her investment in those channels accordingly—which brings us to her next tip.
6. Keep your budget flexible throughout the year.
Budget strategies should almost always change year to year, but in this day and age, they may need to change month to month. For example, back in 2017, RAREFORM appeared on “Shark Tank”—the hit ABC show where entrepreneurs pitch their business concepts to a panel of big-time investors in the hopes of securing financial support to grow their companies.
“For a good chunk of the year, I had no idea we would go on the show, but once we found out, we definitely didn’t want our budget to limit the marketing opportunity it presented,” Morin said. “We knew it would drive a lot of traffic to the website, so we spent a lot more on retargeting afterward. Otherwise, we would have squandered a major opportunity.”
Outside of marketing, the company also prepared for an uptick in business by investing more in support resources, shipping, and logistics. “We spent a lot of money beforehand knowing the likelihood of a big return,” Morin said. “For example, we started using Zendesk instead of just Gmail.”
The bottom line, Morin says: “You always need to be adaptable.”
7. Know where you can get away with cutting corners—and where you can’t.
If there’s one mistake Morin made more often than she’d like to admit, it was scrimping on quality in the name of saving a buck. “It’s easy to fall into the trap of making a quick budget decision based on what is the fastest and cheapest option,” she said. “Doing your research almost always yields better results. My old boss, quoting John Wooden, would always say, ‘Be quick, but don’t hurry.’”
Two areas that often tripped her up: assets and SMS. “I was definitely cheap on the asset side with cheap photographers, cheap models, etc. But if we had just spent more, it would have increased the quality of the final result so it would last longer,” she said.
As far as SMS goes, Morin says the key is looking at it as a channel rather than a platform. In other words, similar to Google and Facebook, ROAS should dictate your SMS spend. Otherwise, you’ll spend too little—and you’ll end up leaving tons of potential revenue on the table.
8. Invest more in SMS.
On that note, whatever you’re currently spending on SMS, there’s a good chance you should be spending more. At the very least, you’ll want to rethink your approach to text messaging in 2022—in terms of both budget and strategy. “When I started doing SMS in 2018, it was more like a bonus—similar to how I viewed a customer loyalty or points program as a great retention tool,” Morin said. “I didn’t consider SMS a core marketing channel.”
Now, as 2021 comes to a close, Morin works with several Postscript customers who say their brands’ SMS programs generate more revenue than email. “Now that we are seeing merchants’ success with, and confidence in, collecting phone numbers over emails, it’s pushing them to see it as more of a core marketing channel and not just a bonus or addendum to everything else they’re doing on more traditional owned channels,” she said.
On the topic of owned channels, Morin says they are becoming more important than ever—especially in light of the changes we’re seeing with third-party channels like Facebook and Instagram. “I always hope people are not overly reliant on unowned marketing channels, because when the platform decides to make changes, it can cause sales to plummet,” she said.
So, instead of leveraging those channels solely for sales-driven advertising, Morin recommends using them to drive new SMS subscriptions. “You can’t text people whose contact info you don’t have, but you can use Facebook to target prospective buyers and people who haven’t been to your website, and then convert them to subscribers,” she said. “You can cast a really wide net.”
But if Facebook is the open sea, your SMS list is a stocked fishing pond—and your chances of reeling in a sale via text are much higher. In the end, that is part of what makes SMS such an effective channel: you’re only messaging people who have raised their hand and said they want to hear from you. “That being said, the competition [with SMS] is increasing,” Morin said. “Remember, back in the ’90s, email had 100% open rates like text does now. But you can’t rely on that as more and more merchants start texting more and more regularly.”
There you have it: 8 tried-and-true tips for making the most of your store’s marketing budget in 2022. So, now that you know how to plan your spend right, happy budgeting season to all—and to all a good night!
Senior Content Marketing Manager
Brooke Andrus is a Senior Content Marketing Manager at Postscript. A journalist by trade, Brooke now uses her nose for news to keep ecommerce merchants informed on industry trends and business best practices.