When preparing the financial plan, we are going to take as a reference the main variables that affect us in Marketing, that is, how to calculate the contribution margin. It is a simple operation: Invoicing, less cost of sales equals contribution margin. + Billing / Income – Cost of sales and other production expenses = Contribution Margin Therefore, these are the fundamental bases of the financial plan in the digital marketing plan financial-plan-in-the-digital-marketing-plan THE GENERAL OPERATING ACCOUNT In marketing and online marketing it is more than enough if we Bahrain Email List calculate the results up to contribution margin, or gross margin, since the rest of the operating account will be part of the general operating account of the company. However, let’s see how to prepare a complete income statement: + Billing / Income – Cost of sales and other production expenses = Contribution Margin – Advertising expenses – Fixed costs – Other expenses = Operating profit + Financial income – Interest on debts = Profit before tax (EBIT) – Taxes on profits = Result for the year To make the financial plan in the digital marketing plan, it is not necessary to calculate all the above parameters, however, this information will be useful to understand how the profit and loss account environment works. EXAMPLE: OPERATING ACCOUNT OF AN E-COMMERCE In order to make it easier to understand how to calculate the operating account of a digital marketing plan, here is an example of what the P&L of an e-commerce could be. Keep in mind that the numbers are fictitious. + Sale of products and / or services: + € 200,000 – Costs of products or services: -90,000 € –
Shipping and handling costs: -15,000 € – Returns costs: -1000 € – Process expenses: € -2,000 = Contribution Margin: + € 92,000 – Advertising Expenses: -5,000 € – Personnel costs: -40,000 € – Rentals and other fixed expenses: -30,000 € = Profit before tax: + € 17,000 This example corresponds to an e-commerce, and will serve as a guide to calculate the financial plan in the digital marketing plan in other possible cases. FINANCIAL INTEREST RATIOS IN MARKETING Obviously, some financial ratios such as ROA and ROE should be taken into account since they maintain a close relationship with the marketing plan, especially if it is for a medium / large size company, however we are not going to Btoc Database delve into this topic. HOW TO CALCULATE ROA AND ROE FORMULA TO CALCULATE ROA ROA = BAIT / AEN = BAIT / V x V / AEN FORMULA TO CALCULATE ROE ROE = BAT / CP = BAT / V x V / CP GLOSSARY ROA: Return on Assets ROE: Return on Equity BAIT: Earnings before interest and taxes AEN: Rotation V: Sales BAT: Earnings before taxes CP: Production costs INVESTMENTS On the other hand, it is necessary to establish a budget, something that may seem quite simple, but in financial terms it is not so simple, since if we are going to calculate the return on investment, we will need to determine the net initial investment and the net cash inflows. or cash flow in order to assess the attractiveness of the capital investment.
The methods to be used for the analysis are: internal rate of return (IRR), net present value (NPV) , benefit-cost ratio (B / C) and payback period (PR). BUDGETS If we take it to the plane of the Digital Marketng Plan, we can imagine the following scenarios: Visits to the Web: Increase by a certain percentage the volume of users who access the website in a certain period of time through marketing actions. Sales: Increase the number of conversions by a certain percentage and during a specific period of time. To achieve this objective, we could define a series of tactics in my action plan, such as SEO, SEM, Branded Content, Facebook Ads. The only thing we have to do is to count the cost of them: SEO actions: € 1000 Adwords campaign: € 2000 Content Generation: € 2,500 Facebook Ads: € 1500 Total: € 7000 To these costs we must add the management costs of the digital marketing agency plus the fees for the conceptualization of the project. To calculate the fees, it will be necessary to set a cost per hour. The total calculation of the number of hours per hour price, plus the management expenses, should result in the cost of the operation, to which you can add a creativity fee if appropriate. CONCLUSIONS To calculate the financial plan in the digital marketing plan in most cases it will be enough if you calculate the contribution margin. If you want to further expand the trading account, you can extend the calculation up to the profit before tax. In the case that you are going to make an investment, it is worth doing the calculations of NPV and IRR. If you work for a digital marketing agency or have your own, you will only have to calculate the budget for the project, such as an online marketing campaign.