Digital marketing is more popular than ever. As a result, corresponding budget allocations are increasing, leaving marketers scrambling to keep up.

Digital marketing spend increased nearly 16% from 2020 to 2021, making it the top priority among advertisers and marketers alike, a recent CMO Survey found.

That shouldn't come as a surprise to any marketing professional who has watched digital marketing shift from an expense to an asset over the years.

After all, digital marketing is so much more than just advertising a product. Digital marketing involves employer branding, building digital authority, and establishing an online corporate brand reputation and presence. Accordingly, this type of marketing is getting the credit it deserves.

When done well, it's a top-line driver of increased revenue streams.

Still, it can be difficult to figure out how much of a marketing budget you should earmark toward digital marketing campaign initiatives, as well as what your overall execution should be. Pervasive B2B digital marketing misconceptions can make the process even harder.

Common Misunderstandings About B2B Digital Marketing Campaigns

When thinking about how to budget for digital marketing in a B2B environment, you need to avoid some of the most widely held misunderstandings about digital marketing.

The biggest mistake is believing that you can spend your way to success.

Although you do need to spend money on digital marketing campaigns to make them effective, you can't keep all your eggs in one basket and expect to see returns. You have to invest in the right areas, such as digital marketing infrastructure. Implementing proper business planning, projections, data dashboards, and expectations will make success more likely.

Unfortunately, too few marketers concern themselves with developing realistic projections and goals to help them dominate the market in the next 1-10 years. Instead, marketers tend to just spend what they have without a plan for success in place.

In fact, many B2B digital marketing campaigns fail as a consequence of basic lack of planning. Case in point: A PPC practitioner may think a 1:3 return on advertising spend (ROAS) ratio is fantastic. Fair enough, but if the company's cost of goods sold (COGS) is 70%, the company will still lose money on every sale, despite the ROAS.

The same principle holds true even if marketers don't take into consideration customer LTV impact, return rates, and retention rates. It's impossible to see a positive ROI if your business constantly has to acquire new customers. You just end up spending a lot on digital marketing without having the data or feedback loops in place to create a smarter budget.

Working Toward a Smarter Digital Marketing Budget

So, what's the secret to constructing a sophisticated, airtight digital marketing budget that's justifiable and sensible?

The first step is to understand all the digital marketing advancements available. That way, it's easier to figure out which ones you want to use for each campaign. Choosing the right tools will help guide your budgeting because you'll know what each one costs to use.

For instance, AI-fueled software is allowing marketers from even smaller companies to remain competitive. The software may be expensive up front, as many businesses spend tens of thousands monthly for best-in-class tools. However, successful marketers know that those tools will make a significant impact rapidly. Thus, the investment makes sense even though it comes with a hefty price.