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Planning for Budget Allocation in Digital Marketing

Conference Paper · December 2018

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 International Conference on Mechanical, Industrial and Energy Engineering 2018
23-24December, 2018, Khulna, BANGLADESH

ICMIEE18-263
Planning for Budget Allocation in Digital Marketing
Md. Mahbubur Rahman, Al-Muktadir, and Samiya Rahman
Department of Industrial Engineering and Management, Khulna University of Engineering & Technology, Khulna-9203,
BANGLADESH

ABSTRACT
Globalization and increased internet usage have generated immense marketing opportunities as well as competitions.
Marketing onthe internet is now an ever growing practice. Digital Marketing, marketing through digital technologies is a new
form of marketing with a few mixes of traditional marketing practices. The aim of this research was to propose a budget plan
for digital marketing. In Bangladesh, digital marketing practices made its way as e-commerce and steadily grew from 2000 to
2008. RACE framework was followed to narrow down the digital marketing operations into four key stages to easily manage
the expenditure. In this study, nearly 50% of marketing budget was allocated to digital marketing, an expense backed by
companies surveyed. This study found that the most popular digital marketing strategy in Bangladesh was Social Media
Marketing (SMM) and the most popular SMM platform was Facebook. This project concluded with a budget plan heavily
focused on Facebook as found by surveys from both consumers and companies.

Keywords: Digital marketing, Email marketing, SMM, SEO, PPC.

1. Introduction immediate feedback is ensured to strong the bond

Digital marketing a global era phenomenon is the between the consumer-seller [4].
marketing of products or services using digital 3. Methodology and approach
technologies, mainly through the internet but also Data and information required for this study were
including mobile phone, display advertising, and any collected from both primary and secondary sources.
other digital medium [1]. Since the late 1990s Primary sources include structured questionnaires and
development in digital marketing has changed the way data collected from different surveys done with startup
today businesses use technology for marketing purpose. companies and consumers. Secondary data was
As access to the internet is becoming more available to collected from the companies, agencies through
the world and digitalization is incorporated in every websites, reports, historical and financial reports from
sector of this modern time people are shifting towards internet and journals. As a means of budget allocation
more digital platforms for everyday life i.e. for digital marketing,the RACE framework was
communication, shopping, consultancy, dining, implemented. RACE is a digital marketing framework
entertainment etc. Marketers exploit these opportunities that simplifies the approach towards digital marketing
for their marketing campaigns and digital marketing thus by dividing into key steps or stages.
becoming more prevalent and efficient. Search engine
optimization (SEO), Social Media Marketing (SMM), e- 3.1 Data Collection Techniques
commerce marketing, Email marketing are common Data collection was done by
practices in digital [Link], digital a. Questionnaires
marketing is expanded to offline channels that provide b. Documents and Records
digital media, such as mobile phones (SMS and MMS), A total number of 7 companies and 30 random
promotion calls, and on-hold mobile ring tones [2]. consumers as respondents were selected for survey
questionnaires. Questionnaires for companies were to
2. Literature review extract the data required for conducting a budget for
Tiago (2014), the paper is about digital marketing and digital marketing whereas questionnaires for consumers
social media. In this paper, interrelating social media were mainly to understand their opinions.
with companies for a good digital marketing has been
discussed. How the internet based applications enhance 3.2Data analysis
marketing practices and improve, was discussed in this Data relevant to this project are categorized into two
paper [3]. sectors viz. companies who do the business and
consumers who the companies do business too.
Corniani (2006) published a paper about digital
marketing communications. It discusses the Data acquired from startup companies
communications which can increase digital marketing a. 87.5% companies’ age is less than 2.5 years
approach. Communications are to be designed in a way and rest of the companies age is more than 2.5
that there should be a question-answer option where the years.
consumers can ask any kind of their queries and an

* Corresponding author. Tel.: +88-01986079838

E-mail addresses: binoy9519@[Link]
 b. 87.5% of companies’ plan their budget for 3 themclicked occasionally and rest of them
months and 12.5% of them for 6 months to clicked hardly.
avoid risk. c. 57.6% of the people regularly check
c. 25% of the companies allocate (45-50) %, 50% message/email delivered from the company
of the companies allocate 50 %, 12.5% of the and 36.4% of them check mostly and rest of
companies allocate (45-55) % and the rest the people check them hardly.
12.5% of the companies allocate (50-55) % of d. 60% of them visited a landing page from an
their firm’s budget for doing the marketing. online advertisement and rest of them didn’t
The weighted average is 4.68%. approach with that.
d. 55.6% of them rated SEO attraction level 3,
22.2% of them rated 2 and the rest 22.2% rated 3.3 RACE approach implementation
4 on a scale of 5. The weighted average of To propose a recommendation on digital marketing
attraction level is 3. budget allocation, RACE framework [5] is used to
e. 88.9% of them rated SMM attraction level 5 approach step by step which makes budgeting goal
and other 11.1% of them rated 4 on a scale of 5. efficient and strategy oriented. It is a strategic planning
The weighted average of attraction level is 4.88. process applied to digital marketing that allows an
f. 100% of companies were favored towards action plan to be structured for digital marketing. As for
Facebook while only 2% had an opinion on every marketing funnel, RACE starts with an initial
Twitter and another 2% had on Instagram phase called Plan where time horizon, targeted audience,
along with Facebook. goals,and strategies are being set. According to Plan
g. 11% of them rated PPC attraction level 1 and agreement companies Reach to targeted audiences,
55.6% of them rated 2 and the rest 33.3% gradually Interact with them to convert into their
reported a level of 3 on a scale of 5. The customers and then continues Engaging with them to
weighted average of attraction level is 1.89. make future frequent buyers.
h. 11% of them rated web optimization attraction
level 1 and 55.6% of them rated 3 and the rest Table 2Proposedbudget allocation plan.
33.3% reported a level of 4 on a scale of 5. The Phase Activities
weighted average of attraction level is 3.11.  Set time horizon
i. 11% of them rated Email Marketing attraction  Target audience
level 1 and 55.6% of them rated 4 and the rest  Increase brand awareness and drive
33.3% reported a level of 3 on a scale of 5. The Plan
sales
weighted average of attraction level is 3.33.  Allocate a firm’s budget for Digital
j. 11% of them rated content marketing attraction Marketing
level31 and 77.8% of them rated 4 and the rest
 Via Facebook posts, pages.
11.1% reported a level of 5 on a scale of 5. The
Reach  Paid and organic advertisements
weighted average of attraction level is 4.
 Paid and organic searches.
Table 1 Company profiles  Content marketing through social
Company Products Website media.
Act
Offerage Aggregated [Link]  Improved web pages
discount offers  searches
[Link] Price [Link]  Content marketing through social
comparison site media
Aponzone Consumer [Link]  Enhanced web page
Convert
electronics  Facebook store
 Email marketing
Pulpy Park Fashion items [Link]
 Guest posts
Aboyob Handcrafts [Link]/
AboyobLifeStyle/  Send Emails to prospective buyers
TailBird Saree [Link]/ Engage  Display ads frequently
Tailbirdfashion/  Ask for feedbacks on products
Ortha Home décor [Link]
It istherefore, recommended thatFacebook, SEO and
Data acquired from consumers PPC are best suited for Reach. Facebook, web
a. 66.7% of people checked ads while browsing optimizations, content marketing, SEO and email
internet mostly and 27.3% checked ads marketing are best suited for Act. Facebook, web
occasionally. Rest of the people checked ads optimizations, content marketing, SEO and email
hardly. marketing are best suited for Convert phase. Facebook,
b. 57.6% people click to next page in search Email marketing, web optimization and PPC are best
engine result page whereas 36.4% of suited for the phase of Engage.

ICMIEE18-263- 2
Factoring the channels according to RACE. 4. Results
Following formula will be used to allocate budget for
Table 3 Factoring the channels(According to RACE) each channel.
Channels Stage presented Factors
SMM RACE 4
Content marketing ACE 3
Email marketing ACE 3
{ }
Web optimization ACE 3 ∑( )
SEO RAC 3
PPC RE 2 Table 8Percentage of recommended budget allocation.
Marketing channels Percentage
Ranking the channels according to attraction index SMM 36%
(higher index represents better indication). Content marketing 21%
Email marketing 19%
Table 4 Ranking the channels (According to attraction Web optimization 9%
index). SEO 10%
Channels Attraction index Score PPC 5%
SMM 4.88 6
Content marketing 4.00 5 5. Discussions
Email marketing 3.33 4 This paper was intended to propose a recommendation
Web optimization 3.11 3 on anapproximate budget allocation for digital
SEO 3.09 2 marketing. The first thing to take into account while
PPC 1.89 1 conducting this researchis there is no exact budget
allocation method for digital marketing and although in
According to conversion rate (CVR), table 4 represents this research a recommendation based on data collected
the ranking among the channels where higher rate from various sources was proposed, it is not advised to
represents better indication [6]. implement this recommended budget directly without
matching with goals and strategies undertaken by
Table 5 Ranking the channels (According to CVR). company policies. Bangladesh is emerging as a
Channels CVR Score developing country so is in great need of start-up
SMM 9.21% 6 companies to boost commerce and trade. This paper was
Email marketing 5% 5 conducted following a typical methodology of
Content marketing 3.75% 4 collecting information through primary sources like
SEO 3.05% 3 surveys from companies and consumers and secondary
Web optimization 2.95% 2 sources such as journals, internet, annual reports etc.
PPC 2.69% 1 RACE framework approach was implemented to narrow
down the vast digital marketing operations into four key
According to cost per click (CPC), table 5 represents stages to simplify strategies and thus budgeting. The
the ranking among the channels where lower cost main drawback for this research was that its planning
represents a better indication [7]. horizon is very small and involved only tech
[Link] surveys directed to companies was done
Table 6 Ranking the channels (According to CPC) with only 8 in total which of course led to a very small
Channels CPC(BDT) Score percentage of whole start-up companies and their
SMM 1.66 6 budgeting information. Key information like conversion
Content marketing 9.50 5 rate, how much revenue does one visitor brings, visits
Email marketing 9.96 4 per page etc. was not available precisely as these are
PPC 10.458 3 confidential data.
SEO 44.654 2 Opportunitiesforbudgeting in digital marketing for other
Web Optimization 150 1 kinds of companies are still open. Although this
research was done with new companies, a similar
Table 7Totaling the score obtained by channels. project on established companies is very much
Channels Total Score (Index score recommended.
+CVR score +CPC score) One of the difficulties in proposing a general digital
SMM 6+6+6=18 marketing budget recommendation is that not all
Content marketing 5+4+5=14 companies are consisted of what they include in their
Email marketing 4+5+4=13 marketing budget. With all the limited information
PPC 3+2+1=6 gathered and drawback faced this research concludes a
SEO 2+3+2=7 general proposal for digital marketing budget plan that
Web Optimization 1+1+3=5 is intended to be a helpful and effective guide to
emerging young startup tech companies in Bangladesh.

ICMIEE18-263- 3
 REFERENCES
[1] Definition of digital marketing. Retrieved 22
August, 2015, from Financial Times.
[2] BEST Digital Marketing Course. Retrieved 28
June, 2018, from
[Link]
digital-marketing-course
[3] Teresa Tiago, Digital Marketing and Social Media:
Why Bother? ,(2014).
[4] Margherita Corniani, Digital Marketing
Communication, (2006).
[5] Introducing RACE: a practical framework to
improve your digital marketing. Retrieved June 28,
2018, from [Link]
marketing-strategy/race-a-practical-framework-to-
improve-your-digital-marketing/
[6] Google Ads Benchmarks for YOUR Industry
[Updated!].Retrieved June 28, 2018, from
[Link]
google-adwords-industry-benchmarks
[7] Average Conversion Rates by Industry. Retrieved
June 28, 2018,
from[Link]
ogle-adwords-average-conversion-rates-by-
industry-study/

ICMIEE18-263- 4

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