Digital Marketing for Wineries: Where to Invest Your Budget
I’ve seen it happen a hundred times.
A family-owned winery hires a skilled new marketer, and what’s the first thing they want to do?
Invest in digital advertising.
But, there's a problem. Management doesn't have any budget for it.
"We've never done it that way," they say. Or "We don’t really get customers from online.”
Both answers reflect a misunderstanding of the value of digital marketing.
Where people shop and how they spend their time is always changing, and successful wineries need to adapt along with them. If your winery isn’t getting customers from online, it’s not because your customers aren’t shopping on the Internet, it’s because your winery marketing strategy is lacking.
And you can't build a competitive strategy without allocating some of your budget to digital channels.
To help you invest your marketing and advertising budget correctly, we're going to look at what a digital marketing budget is, get an overview of the channels that have traditionally performed well for brands in the wine industry, and then I’ll provide a general recommendation on how to divide your budget effectively.
Defining a Digital Marketing Budget for Your Wine Brand
This may sound basic, but the first step in deciding where to invest your budget is having a solid grasp of what a digital marketing budget is. (This will be particularly helpful if you’re the marketing manager trying to make a case to your supervisor).
Definition: A digital marketing budget is a projection of all costs required to effectively promote your winery online.
Put another way, it’s the amount of money you need to accomplish your marketing goals in the online space. Of course, in order to know what you will need to reach your goals, you first have to set your marketing goals.
When setting your digital marketing budget, it’s helpful to benchmark against what others are doing.
On average, companies with under $25 million in revenue spend between 11-13% of their sales budget on advertising. Of that 11-13%, restaurants and local businesses (a category that includes wineries) spend about 40% of their advertising budget on digital, and 60% on offline advertising, including print.
Digital Marketing Channels to Test
So what will it take to call your digital marketing campaign a success?
If you're just dipping your toe in the water for the first time, it's difficult to know what success looks like because you don't have any existing metrics to baseline against.
That's ok. You have to start somewhere.
To get a sense of which digital platforms work best for your business, let's look at some of the most common digital marketing channels.
Email marketing is an essential tool for keeping and cultivating existing customers. Most wineries will be able to launch an email campaign with their existing staff, or if budget allows for it, may choose to outsource it to an agency.
Using email effectively means more than just sending occasional email updates. Instead, it’s best to create campaigns. By sending three to five related emails successively, you have a greater chance of converting your subscribers into paying customers.
When considering a digital marketing campaign, email is the place to start, as they have been shown to be 40 times more effective than Facebook and Twitter combined and can result in 17% more revenue.
Why is email so effective?
Because you are only marketing to people who have expressly shown interest in your products and willingly given you their contact information—everyone on your email distribution list is a warm lead.
How Much Of Your Marketing Budget Should You Allocate To Email?
If your subscriber list is small (under 2,000), you may be able to get away with allocating time instead of dollars to your email marketing.
By creating your campaigns in-house and utilizing a free email service, you won't incur any additional costs, besides paying the salary of whoever is running your campaign.
When your email list grows larger, you may have to start paying a nominal fee to your email service in order to manage the campaign size, but these fees are generally small.
Organic social media marketing refers to the content you produce and post to your social media accounts, but don't put any dollars behind promotion.
Anyone who follows your accounts can see this content and interact with it. Since it's free, this is low hanging fruit that every winery should be taking advantage of.
Paid social media refers to ad buys on platforms like Facebook, Twitter, and Instagram.
Before you start paying for advertising, however, it's best to have a customer profile that tells you who to target. Is your best customer local, or a visitor? Male or female? In their 30s or their 60s?
Since social media advertising allows you to easily target based on these demographics, you can leverage your consumer knowledge to get the most bang for your buck with your ad dollars.
How Much Of Your Marketing Budget Should You Allocate To Social Media?
According to one study, the average company spends about 12% of their budget on social media today but expects to increase that amount to 22% over the next five years.
Search engine optimization (SEO) isn't really a channel.
Instead, it refers to the optimal way to set up your website (which is a channel) in order to rank higher in Google, Yahoo, Bing, etc. search algorithms.
Like email marketing, SEO is something that you can do on your own, or at least start on your own, and therefore doesn't cost a lot of money.
Caveat: if you have a massive website with multiple pages and a deep blog archive, you may want to invest in hiring someone for SEO, as it gets more complicated with increased content.
Non-technical SEO primarily consists of external and internal link building, keyword research, and content creation.
External link building is about gaining links to your website content from other reputable sites. There are several tactics that can be used to generate backlinks, some more time consuming than others, but the general rule is, the more high-quality backlinks you have pointing to your site, the higher you will rank in search, and the best way to get people to link back to your content is to create great content.
Internal link building is the process of creating a content network on your website. One popular method for accomplishing this is using topic clusters and pillar pages. A pillar page is a lengthy page filled with general content about a subject. Each pillar page links to multiple topic pages that contain specific content and each topic page links back to your pillar page.
For example, you might have a pillar page about red wine in general, including a list of your products, some information about grapes and vineyards, and some awards your winery has won.
This pillar page would link to articles or pages about each of your red wines, your online store, and even other articles like "how to remove red wine stains from white cloth."
Each of these pages, in turn, links back to the general red wine pillar page. As a result of all these links, search engines will decide that your website should increase in search ranking, and you will see an increase in traffic (and hopefully conversions).
Content creation is closely related to link building. As you create content for your website, including product pages, blogs, and information, always link to other pages on your website. You should also be aware of the keywords you want to rank for and create content around them, although keyword ranking isn’t as important as pillar pages and topic clusters under the current Google algorithm.
How Much Of Your Marketing Budget Should You Allocate To SEO?
As I mentioned, SEO can be done for free, it just takes time and intentionality. Simply repurposing existing content and increasing the number of links between pages and articles on your website can boost your SEO with minimal effort.
I do want to mention that even though creating high-quality content is one of the more time-consuming marketing activities, it is something that should be kept in-house or under the guidance of someone from within your organization who is an industry expert for as long as possible.
It's never wise to outsource your core capabilities to someone who doesn't have your set of industry expertise, and content creation is one of those activities that defines who you are as a brand.
To keep your time and money resources balanced, my advice would be to outsource the content distribution efforts (organic social media promotion, advertising, etc) instead of the actual creation process. No one is going to understand your industry, business, or product like you do - you are the thought leader in the space and therefore, should own the production of the content you create for your site.
Native advertising refers to the practice of placing content ads alongside other website content in a seamless and unobtrusive format.
For example, if you were trying to reach business professionals, you might write an article with the title, "How Hosting a Leadership Retreat at this Napa Vineyard Led to a Million Dollar
Breakthrough” and pay to have it featured on Forbes.
Native ads are viewed 53% more frequently than display ads and result in an 18% increase in purchase intent. However, make sure you are placing the content on websites that are frequented by your target customers.
How Much Of Your Marketing Budget Should You Allocate To Native Advertising?
There is no standard answer for this.
My best recommendation is to pay attention to your customers, build a consumer profile, and then experiment with native advertising on websites where they are known to get their information. If you don’t have this kind of demographic info on your clientele, it may be better to invest in other channels until you do.
Geofencing is the practice of providing specific content to individuals based on their physical location, as determined by either their IP address or a function of their mobile device, such as RFID. You can make the location as specific as an organization, or as broad as a country. The parameters are up to you and the targets you want to focus on. Geofencing is cost effective when you know where your target customers are.
How Much Of Your Marketing Budget Should You Allocate To Geofencing?
Like native advertising, investing in geofencing requires knowing a lot about your consumers. If you can see a straight path to value by geofencing a particular area, then consider geofencing (for instance, you are offering wine tastings at an event and want to target content to people within the event circumference).
But if your consumers are spread out, or investing in an app would be too expensive, I recommend focusing efforts on other channels, or incorporating geofencing into other ad buys.
For example, focusing on a region when paying for ads on Facebook and Instagram.
Pay Per Click (PPC)
Pay per click is what comes to mind when most people think of digital advertising. These are the ads that you see on top or on the side of search engine results pages with the small “ad” icon. Sponsored content that you might see on social media is also considered a form of pay per click.
The amount you pay depends on how much demand there is for that keyword, as you have to bid against other companies interested in the same terms. While there are advantages to using PPC, it is best to only invest in it if you have a clear treatment stream for each person who clicks.
How Much Of Your Marketing Budget Should You Allocate To Pay Per Click?
How much you invest in PPC really depends on your bandwidth.
Do you have enough sophistication to monitor a PPC campaign? Do you have clear strategic goals and a well-planned treatment stream you can direct people to?
If not, focus on wine marketing tactics like SEO and email until you have a treatment stream built.
This article first appeared at Hearst Bay