E-COMMERCE MARKETING BUDGET 2021

The success of the e-commerce budget course we launched earlier this year has confirmed that, to date, most Italian e-commerce companies have understood the importance and necessity of defining the e-commerce marketing budget. This course was introduced by a Netcomm Academy webinar and it attracted 160 members, including 110 live attendees in less than a month.

 

E-COMMERCE MARKETING BUDGET

The E-Commerce Marketing Budget (EMB), not to be confused with the business budget, is the planning of e-commerce objectives in terms of marketing team KPIs. The difference in the company budget is that the costs, in the case of marketing, are limited to media and technological investments so as to manage online sales processes.

The Marketing Budget, therefore, consists of planning objectives, taking into account the relationship between marketing investment and revenue from online sales. This particular relationship should define all performance analysis KPIs at every step, starting at investment and going all the way to confirmation of sales.

 

WHY IS IT FUNDAMENTAL FOR AN E-COMMERCE COMPANY?

The marketing budget shows the expected performance targets of e-commerce. These objectives are essential for the development and definition of the investment plan of online advertising. In addition to planning, objectives allow the monitoring of performance over time. The monitoring must be carried out in such a way as to enable improvement of strategies or consolidation of results. In fact, if you do not know the goals, it is almost impossible to understand whether or not the marketing strategies are delivering acceptable results. Thus, it would be impossible to judge whether it is better to take a different, and perhaps more effective, path. In most cases, this leads to the impossibility of achieving the expected results. 

 

OBJECTIVES AND KPI OF MARKETING BUDGET

The main objectives coincide with the turnover you want to develop in online sales (in relation to marketing investments, which will then generate turnover). Behind these general objectives are several KPIs for analysis and understanding of performance, such as:

• Conversion Rate between impressions, online store visits and sales; 
• Capture values: Cost of impressions, clicks, visits and sales.

Finally, key performance indicators as objectives of the Marketing Budget are:

• ROAS - Return of Advertising Spend;
• ROI - Return on investment (e-commerce performance)
• User/Customer Value - Value of users and customers.

 

HOW DOES BUDGET DEVELOP OVER TIME?

The general budget is defined in the annual accounting period, this can either be the calendar year or accounting year of a company. For the forecast of the coming year, it is essential to define and consolidate historical years with the values achieved by e-commerce based on the same data organizational model used to structure the forecast. Once you have defined both the consolidated and forecast budget years, they must be redefined and broken down into sprints (defined periods of time). A sprint can correspond to a solar month or other periods, such as weeks or quarters. To sum it up, the annual planning shows the overall target values, whereas the sprints set micro-targets so that we can break down and achieve those annual target values.