PESO Marketing Mix Budget
An example of a business to business marketing mix using Paid, Earned, Shared, and Owned media.
Key Takeaways
Identify the influencers in the space.
Identify common problems for would-be customers.
A business should be putting about 2 to 4% of the the gross revenue towards marketing.
So how do we know what percentage of each type of media to use?
The answer to this question is going to depend on your industry, your budget, and many other factors.
Let's go through an example of a business to business marketing mix complete with budgets and predictions. Let's use an example of XYZ Company, a business to business company specializing in big data management.
Assumptions:
The current revenues $10 million, the goal revenue is $15 million, and an average sale is $250,000.
The current traffic to the site is about 5000 visitors per month.
The current and visitor to lead conversion is a rate of about point 5%. And lead to scale conversion rate is 20%.
In order for XYZ to gain 5 million and new sales, they will need 20 new customers who pay their average fee of $250,000 (Note: the Vice President of XYZ insists that none of his current leads in the pipeline came from a Google search).
Strategy:
Identify the influencers in the space. Who is the one person or group of people buyers will listen to? What Twitter handles or LinkedIn groups are actively influencing the target market?
Identify the problems that would-be customers are facing on a daily basis. For example, they may say “I need all of my company data in one place” would be a problem.
What are some search phrases in the space that are being used frequently, jargon, or acronyms? By using Google's search tools, you can uncover data from searches and even pinpoint some geo locations where the terms are searched more often. You can use that geo target to run a campaign or even run a direct mailer in those areas.
What are the primary competitors doing for search? What keywords are they targeting and bidding on? What kind of content are they promoting on their website? Are they retargeting?
What newsworthy things is the company doing or engaged in that could be used in a series of planned press releases like the acquisition of another company, the launch of a new product, or the opening of a new office or a new market?
What content needs to be developed? What should be segmented into blogs, How To’s, infographics, white papers, and ebooks? Should there be resource section on the website? Do you need video content (YouTube is the second largest search engine and 60% of the content is corporate)?
Develop a content calendar and strategize where to build up owned media and influence shared media.
Determine the proper marketing mix:
Paid Media
Let's say research shows that the average cost per click on many of the industry words is about $10 per click. One should try to get at least 30 clicks per day to have enough data to make campaign decisions that are statistically significant.
So, XYZ would be looking at about $9,000 in clicks and about $840 a month in management for Google AdWords. Expand onto platforms like Bing and Yahoo with retargeting and other vertical display options, and the price could go up to about $20,000 per month fairly quickly. But for XYZ, allocate $10,000 at the low end and $20,000 at the high end.
Owned Media
You may want to build up the corporate content quite significantly. However, you want to be careful to not make the corporate content sound too biased or too technical.
The SEO plan will address things like blog content, writing, and beefing up existing page content for products or services. But additional budget will be needed for things like white papers, ebooks, and infographics.
All of your pieces should be well designed with both digital and print versions (don't skimp on the design, it matters). For XYZ Company, the plan is for $2520, but might want to budget an additional $5000 per month for the creation of these and other pieces.
Earned Media
You might want to target one press release per month. You can syndicate your press release through a distribution platform called PR Newswire. The result could be hundreds of additional links pointing to your website. This is great for SEO and some inquiries. This channel might also take some creative thinking about some of the potential viral content you might be able to produce in written or video mediums.
Any poor ratings or reviews of your business will need to be addressed and may require some additional monitoring. Allocate $5000 per month in case XYZ company already has a public relations firm on retainer.
Shared Media
There should be a team of folks monitoring the social networks, LinkedIn groups, forums, other blogs etc. Not only to see what the customer sentiment is for the industry, but also to keep a lookout for opportunities to engage in conversation, share a post or a white paper, address a problem with potential solutions, and syndicate your content through these channels to make XYZ’s brand more visible. One should budget an additional $1500 for the monitoring and engagement. Plus, $3000 per month if already has a social media company.
So the total dollars allocated for the XYZ Company marketing mix would be:
Paid media $10,000 to $20,000 a month
Owned media $7500 per month
Shared media $3000 per month and
Earned media $5000 per month.
That's a total of $25,500 to $35,500 per month (or $306,000 to $426,000 per year).
Sound like a lot?
Well, let's consider that a business should be putting about 2 to 4% of the the gross revenue towards marketing. So in the case of XYZ, you could argue that they should be spending about $400,000 per year (excluding any marketing staff salaries or overhead). This puts them in line with the 2-4% rule.
Paid media spending $10,000 per month should result in 1000 new visits to the site or landing page. At a .5% conversion rate from visit to lead, one can hope to get 60 leads in a year.
For owned media, the SEO prediction suggests that XYZ can increase the traffic flow of the website from 5000 per month by 40% to 60% by the 12th month. This results in a net increase of traffic of 2000 to 3000 more visits by the 12th month. The total increase over 12 months is about 16,000 visits. This equates to a new potential lead flow of 80 per year. By using the same assumptions for qualified lead ratio and close ratio, this channel could generate eight additional customers at another $2 million.
For earned and shared media, it may be difficult to attribute any leads or soft conversions to things like social media and public relations. For this reason, we utilize the multi-channel funnel option and Google Analytics to give us a better sense of how these channels may be assisting in conversions down the path. Some of these will have a direct impact on lead generation such as press releases; and some social activity can be tracked and directly attributed.
But overall, if this sample campaign is executed, performs as expected, and the assumptions hold true, then the $400,000 investment could yield the company nearly $4 million in sales. Thus, giving them 10 times the return on investment for the campaign.