Digital Marketing Budgeting to Smash eCommerce Targets

Welcome to the third and final part of my blogging series around marketing measurement. So far we’ve looked at how to calculate customer lifetime value and then how to calculate the amount of digital marketing budget you’ll need to meet your targets. This blog post looks at how to proceed once you’ve got your digital marketing budget by looking at the different channels and deciding what would work best for your brand.

Step 1: What is your digital marketing goal?

Let’s start at the very beginning. Your business goals must be clearly defined before you start as different channels serve different purposes. Let’s take the example from previous posts in the series of Brand X with the SMART goal:

  • Brand X’s Goal: Brand X wants to grow turnover by 50% from £850,000 to £1,275,000 (£425,000 increase) in 2016

Step 2: What is your digital marketing budget?

This all-important figure is again something that you will need to know before setting out on your budget planning journey. So let’s once again take Brand X as an example:

  • Brand X’s Budget: Brand X has a yearly marketing budget of £159,375

Step 3: What digital marketing channels have driven sales in the last 12 months?

Hopefully you have Google Analytics eCommerce Tracking set up to enable you to track eCommerce revenue and transactions. This data is essential to measure the success of previous digital marketing campaigns and in doing so, plan for future success. Here’s the best way to find what’s working for you:

  • Look at the report found in Google Analytics > Acquisition > All Traffic > Channels


  • Select “eCommerce” under the conversions section and you can clearly see the most valuable channels for generating revenue. If you sort this by revenue rather than by the default of sessions (traffic) then maybe your most valuable channel isn’t the same one that drives the most traffic.
  • Look deeper into each channel source, particularly paid search and referral sources and you can see the success of bidding on different keywords and the value of certain directory listings or blog coverage. Some sources may be sending traffic but are they sending traffic that converts?
  • Look at what kind of split there is between the channels. What percentage is each channel source delivering in annual revenue?

blog2 Of course, it is worth considering that this report shows conversions based on “last click” attribution which will not account for the overall customer journey across channels, only what channel they converted from.

Step 4: Evaluate and understand the pros and cons of different channels


Percentage of online revenue you can expect SEO to drive: 40% – 80%

If an eCommerce site is optimised at product and category level, SEO will typically drive between 40% – 80% of the total website revenue. As your domain gains more authority over time you will naturally rank for tens of thousands more keywords, driving even more revenue. SEO is typically the channel which will drive the lion’s share of sales for eCommerce websites. This is largely as SEO can target consumers who are searching in Google for terms which show clear intent to buy. Here’s an example of different types of keywords which you might optimise your website for and the purchase intent different keywords typically have…

eCommerce PageKeyword ExampleSearch Volume1st Visit Conversion Rate
CategoryEquestrian clothingHighLow
Sub CategoryHorse riding jacketsMediumMedium
Brand CategoryMark Todd riding jacketsMediumHigh
ProductMark Todd Blouson Jacket in Red / Navy / GreenLowVery High
Content i.e. Blog Pages or Buyer’s GuidesBest technical clothing for horse riding (links to sub category/products)LowHigh


Percentage of online revenue you can expect PPC to drive: 0% – 80%

Pay per click can be a great way to instantly drive sales, but the channel does not suit everyone. Considering your existing brand awareness, website conversion rate, competition and amount you have available to spend may result in the realisation that PPC is not a viable option. However, PPC is a channel which is definitely worth testing as for many eCommerce businesses, PPC is the main source of online revenue driving millions of pounds in online sales year after year.


Percentage of online revenue you can expect email to drive: 10% – 30%

Email is consistently voted as one of the channels that delivers the best ROI year after year.

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The beauty of email campaigns is that your customers have asked to hear from you. They have signed up because they’re engaged with your brand and products, combine this intent with the data you know about your email customers (gender, birthday, purchase history, opens, clicks and preferences to name a few) and you’ve got great opportunities.

Social Media

Percentage of online revenue you can expect social media to drive: 0% – 10%

People are often surprised to learn that social media is not a big driver of revenue, in fact research from Forrester found that social media generated less than 1% of online sales1. Research like this demonstrates how social media is a channel which is most appreciated when looking at goals around brand awareness and relationship building. However, many new customers can be found through social media by utilising your existing customer base and it’s a good way to build trust with your audience. Often the bridesmaid and never the bride, social media is typically a key point in the customer journey, but due to last click attribution, will not likely be credited with the sale.

Affiliate Marketing

Percentage of online revenue you can expect affiliate marketing to drive: 0% – 20%

Affiliate marketing campaigns are often a way to reach a vast new audience. For example voucher code websites may have a customer database of a million people, many of whom have never heard of your brand until the voucher code company promote your brand to their audience. On the negative side of the equation, you are giving away a chunk of your revenue away in affiliate commission in exchange for the referral and providing discounts or special offers may not be appropriate for certain brands.

Step 5: What channels should you invest in to increase eCommerce revenue?

Here we take a look at the percentage split across channels which we have typically seen from working across a wide range of eCommerce websites and have included an example digital marketing budgeting strategy for Brand X.

Digital Marketing ChannelRevenue Typically Generated By ChannelTypical Budget Weighting %Yearly £ Budget For Brand X ExampleBrand X Budgeting Strategy Insights
PPC0% – 80%0% – 80%£72,000
  • If you’re not doing PPC at all, try running a test campaign.
  • If your revenue is on the lower side of the percentage range look at testing more spend.
  • If your revenue is on the higher side of the percentage range look at maintaining the spend and possibly adding more SEO investment.
SEO40% – 80%10% – 30%£36,000
  • If your revenue is on the lower side of the percentage range, test increasing the budget.
  • If revenue is on the higher side of the percentage range, maintain what you’re doing and consider testing new budget in PPC.
Social media0% – 10%1% – 20%£16,000
  • If your revenue is on the lower side of the percentage range increase investment with a test campaign.
  • If your revenue is on the higher side of the percentage range, look at maintaining what you’re doing and investing in other channels.
Web Development / MaintenanceN/A10% – 30%£12,000
  • Regular web maintenance will be needed to support your investment in other digital marketing channels
  • You’ll need to set more budget aside the larger and older your site is and less if you’ve recently upgraded your site and can manage many of the changes yourself.
Email10% – 30%1% – 20%£6,875
  • If your revenue is on the lower side of the percentage range, increase investment by testing increasing the frequency or adding marketing automation / abandoned basket capabilities.
  • If your revenue is on the higher side of the percentage range, look at maintaining the current spend and investing in new channels.
DesignN/A1% – 10%£5,000Important for brand engagement and will require investment for maintenance.
PhotographyN/A1% – 5%£5,000Important for conversion rate and will require investment for maintenance.
ContentN/A1% – 10%£5,000Could be included under SEO/social media or split separately depending on your set up, investment will always be required to communicate benefits to customers.
AnalyticsN/A1% – 10%£1,500Investment needed to ensure accurate tracking of campaign success and ongoing decision making.
Affiliate Marketing0% – 20%0% – 10%£0Not applicable for Brand X this year, but could be a potential channel to test in the future.

Every brand is different and depending on the landscape of your industry, competition and audience, strategy will of course differ. It is also worth noting that your budget goes further with good integration across channels and tying these together will infinitely improve your customer journey.

Thanks for reading

If you’re interested in marketing metrics and the best way to measure the performance of digital marketing campaigns follow my contributions to the ThoughtShift blog. Or get all the best blogs in one handy email and sign up to our guest list.



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Category: Digital Strategy

About the author: Olivia Collins

Olivia has over 3 years of digital marketing experience, with expertise in digital strategy across content, email marketing and social media. With a degree in Advertising and Brand Management Olivia designs strategies that provide audiences with useful content and has successfully delivered B2C and B2B email marketing campaigns generating thousands of pounds for brands like Calumet Photographic and Employer Advice.

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