How to Create a Budget for Digital Strategy [With Template]

Digital strategy is all about positioning your business in the best possible place using cutting-edge digital solutions. It’s a vast expertise that ensures your digital presence is solid, future-proof, and aligned with your business goals.

It serves as a detailed guide for your business, taking into account your target demographics, industry competition, goals, and key performance indicators (KPIs).

A digital strategy differs from a digital marketing strategy. They may have similar goals, but their complete scopes and responsibilities are different.

Whichever way you look at it, a good digital strategy is crucial to the success of your business. Without it, you may be missing out on many growth opportunities.

That said, the key question is how much businesses need to invest in their digital strategies. Searching the internet won’t provide a concrete answer, as it depends on your specific business needs.

This detailed guide will break down all the components and steps you need to know when creating a practical budget for your digital strategy. 

A dedicated partner is what you need after you read this. Find and connect with the best digital strategy agencies on Clutch.

What Goes Into a Digital Strategy Budget?

Before you sit down and stare at your sheets, it’s essential to understand what digital strategy is and what components contribute to its budget. Whether you have an internal team to take care of your digital strategy needs or plan to hire an outsourced partner, you will need to know where your funds go.

Saying that digital strategy is broad is an understatement. Here are all the major elements and expertise it encompasses:

• Digital marketing plays a massive role in helping businesses unlock new opportunities and reach new customers. Digital strategy experts collaborate closely with marketing professionals to create a bespoke digital marketing plan that can produce higher conversion rates.
• Digital advertising differs from digital marketing, but it is equally important. Digital strategy ties them together, ensuring they work cohesively to help the brand generate more interest and boost sales.
• Web development demand has significantly increased in recent years as more businesses strive to establish a credible online presence. Digital strategists work closely with dedicated web developers to make sure that the website they’re building provides the best leverage for the business.
• Web design encompasses one of the most crucial aspects of digital strategy — visual communication. Digital strategists oversee the designs and ensure they provide an optimal user experience.

Great digital strategists understand how to integrate the four major components of a digital strategy, ensuring they work together seamlessly to achieve your business goals.

Each element plays a distinct role, and when combined thoughtfully, they create a cohesive, high-performing strategy. Careful planning and alignment across these channels are essential to maximize impact and ROI.

When allocating your digital strategy budget, it’s important to follow best practices for distributing funds effectively across channels. Analyze the performance potential of each channel, prioritize based on your goals, and ensure a balanced mix that supports both short-term campaigns and long-term growth. 

Consider investing in high-impact areas like automation and CRM for efficiency, while maintaining adequate spend on social, search, and email to drive engagement and conversions.

How Much Should You Budget for Digital Strategy?

The budget for a digital strategy depends on your business size, goals, and the channels you plan to use. There isn’t a one-size-fits-all number, but most companies allocate 5-15% of their overall marketing budget to digital initiatives.

When planning your budget, focus on allocating funds effectively across various channels. Prioritize channels that directly impact your goals. A good approach is to balance investment between high-ROI activities and experimental or growth initiatives, ensuring you have the room for growth. 

How to Create a Budget for Digital Strategy

1. Know Your Needs
2. Evaluate Your Revenue
3. Assess Your Marketing
4. Research Necessary Tools & Technologies
5. Consult A Professional

1. Know Your Needs

Before researching costs, the first and most crucial step is to understand your business needs. As mentioned above, four major components make up an impactful digital strategy, and since every business is different, they one more than the others.

For instance, there may be brands that already have existing websites with compelling designs, but they don’t have a great reach to their customers. In that case, the digital strategy will focus more on digital marketing and advertising, and the budget should reflect that.

Understanding your needs is the most fundamental step in any business partnership or project. Knowing will also help you communicate your needs to potential service providers and research costs more effectively.

2. Evaluate Your Revenue

The next step when planning your budget is to evaluate your revenue and finances. During this step, you can call on your leadership team to discuss your business’s financial performance from the recent quarter or year and break down how much you’re willing to spend on digital strategy.

If your business hasn’t been performing well or isn’t as financially stable as it should be, don’t pour everything into your digital strategy budget.

Remember, you can still get great results without breaking the bank. You simply need to create a practical budget and utilize the resources you have. 

3. Assess Your Marketing

Marketing is arguably the most significant component of a digital strategy. Most, if not all, businesses already have existing marketing strategies and efforts in place.

After taking a deep dive into your finances, you can assess your current and previous marketing activities.

Ask yourself the following:

• How much does it cost to acquire a lead?
• What are your current marketing channels? e.g. email marketing, influencer marketing, and content marketing
• What key metrics matter the most for you?
• What results have you generated with your previous marketing efforts?
• What are your marketing goals and pain points?

Answering questions like these will help you better understand what to improve and how much to allocate for it. Lastly, always keep in mind that marketing may be a major piece in the puzzle but it should not dominate your budget allocation. 

4. Research Necessary Tools & Technologies

The fourth step when preparing a budget can be overwhelming, especially considering the broad digital strategy and the wide variety of related tools available. For this step, it’s best to work closely with your leadership team and digital strategists.

Based on your identified needs, what are the necessary tools, apps, and technologies you need for your digital strategy? Each business needs different solutions.

To stay organized while researching, create an Excel sheet and organize the tools based on which components they fit. After you’ve looked up everything, compute the total for each component to see where your budget is going and prepare for projected costs.

5. Consult A Professional

You can search the internet tirelessly for answers on how much to spend on your digital strategy, but you won’t find any concrete answers. The best way to know how much to allocate for your budget is to consult with a professional directly — they may be from your internal team or a third-party service provider.

The knowledge you’ve gathered from the initial stages of your planning will help you communicate your needs with them more clearly.

If you’re planning to hire a digital strategy service provider or freelancers, consider their fees for your budget. When you sit down to discuss with them, inquire about their pricing structure and the cost of their services.

Do they charge an hourly rate or a project rate? Will they provide the tools you need? What is the scope of their expertise? Don’t leave anything out, and ask everything you need to know to prepare a practical budget for your project.

Read here: “Digital Agency Pricing Guide”

Digital Strategy Budget Template

Download Clutch’s digital strategy budget template.

Factors Affecting Digital Strategy Costs

Many factors determine digital strategy costs, and being aware of each will help you know what to consider when budgeting. Here are factors that you should consider carefully:

• Tools
• Industry
• Business size
• Business goals
• Location
• Personnel

Every business has its own needs and goals. Some of these factors might not affect them as much, but it’s important to stay flexible and informed when budgeting.

Grow Your Business and Budget Your Digital Strategy Wisely

No one should go into business without a plan. Even for small businesses and startups, there’s no excuse not to maximize digital strategies and solutions.

A compelling digital strategy will serve as your tactical roadmap to help you reach your goals, avoid overspending, and maximize your return on investment.

When crafting a digital strategy budget, always keep an open mind and hear any input or tips from your team members. Don’t rush it; instead, do your best to research the crucial components addressed in this piece.

Now that you know everything that should go into your budget, make the most of it by working with a proven partner. Connect with the best digital strategy agencies on Clutch.

About the Author

Elaine Margrethe Alcantara

Elaine Margrethe is a part of Clutch’s global team of writers. She is responsible for writing blogs, supporting blog processes, and content creation efforts.

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