Learning Objectives

By the end of this lesson, learners should be able to:

• Prepare a basic digital marketing budget.
• Allocate resources across channels.
• Calculate ROI.
• Explain customer acquisition cost.

3.1 Marketing Budget Components

Typical digital marketing expenses:

• Advertising,
• Content creation,
• Design,
• Video production,
• Software tools,
• Website maintenance,
• Training,
• Freelancers or agencies.

3.2 Budget Allocation Example

Channel	Budget (KES)
Facebook Ads	20,000
Google Ads	15,000
Content Creation	10,000
Email Marketing	5,000
Analytics Tools	5,000

Total: 55,000 KES.

3.3 Fixed vs Variable Costs

Fixed	Variable
Software subscription	Advertising spend
Website hosting	Freelance design
Domain renewal	Video production

3.4 Return on Investment (ROI)

Formula

ROI = ((Revenue − Cost) ÷ Cost) × 100

Example

Revenue = 120,000 KES
Cost = 40,000 KES

ROI = ((120,000 − 40,000) ÷ 40,000) × 100 = 200%.

3.5 Customer Acquisition Cost (CAC)

CAC = Marketing Cost ÷ Number of New Customers

Lower CAC generally indicates greater efficiency.

3.6 Resource Allocation Principles

Invest more in channels that:

• Produce quality leads,
• Generate sales,
• Have positive ROI,
• Support strategic goals.

3.7 Practical Activity

Create a monthly digital marketing budget of KES 50,000 and calculate ROI for a sample campaign.

Lesson Summary

Budgeting and ROI analysis help businesses allocate marketing resources efficiently and evaluate financial performance.