Budgeting for success

How does budget impact on an eCommerce website’s effectiveness?

The comparison

Free Facebook advertising can only get a business so far, relying on existing customers for conversions. But when a business invests time and, importantly, money in their digital marketing strategy, new customers are accessed and more conversions result.

Compare the below two companies, one which relies on a small digital marketing budget, and one that has spent more time and money to build a wide online customer base.

 

Company A

A small budget for their website and a risk-adverse attitude to advertising.

This company has strong branding, but a lack of a brand message and effective utilisation of digital marketing resources. This has led to them being an essentially forgettable company for customers.

The stats:

  • Does not pay for Facebook or Google advertising
  • Under a 1000 likes on Facebook having been active for nearly 5 years, posts on Facebook about once a week
  • Around 2500 followers on Instagram, around 250 posts in total, posts on average once a week
  • Hasn’t yet built an online community through social media interactions
  • No active approach to driving community engagement
  • Lists stock additionally through Etsy, which sees better return compared to sales through their website due to lack of web traffic and brand recognition

 

Company B

Started with a small budget but has spent time and money on Facebook advertising.

This company has relatively weak branding compared to Company A, but the brand’s image and message is strong. This has led to them being a very well-known brand.

  • Spends on average $3–4k per month on Facebook advertising
  • Around 1/4 of their posts are sponsored and around 3/4 are unsponsored
  • Grew from 500 Facebook likes to 50,000 within 3 years after having been active for 5 years, posts on average 4 times a day
  • More than 40,000 followers and 2500 posts on Instagram, posting around 3–4 posts a day
  • Utilises social media platforms to build an engaged community. Consequently, is able to share content produced by customers themselves
  • Showcases additional stock on Instagram and Depop to generate one-off sales
  • Regularly launches new product lines and one-off experimentation/prototype stock to keep the community interested
  • Drives engagement through all channels by interacting with customers, as well as posting lifestyle material relevant to customer base

 

The results

Budget constraints have meant a wider reach was achieved for Company B through social media platforms alongside paid advertising, whereas Company A doesn’t have any sponsored posts so is unable to engage with the market.

Company B, compared to Company A, increased Facebook views by 2000% since they began their digital marketing campaign – where Company A had 15 views, Company B had 30,000 Facebook attributed views.

Company A is unable to build additional value for customers, as it doesn’t engage with its community to fuel innovation or launch updated product lines in a frequent enough manner, while Company B has consistently snowballed user engagement, building value and encouraging recurring sales with new and interesting product lines to its existing customers.

On the whole, Company B saves time and money by marketing to existing customers through unsponsored social media platform advertising, as well as marketing to the general public through sponsored advertising.