A digital marketing strategy is a nonnegotiable element of a successful company. Billions of people use the internet at any given time during the day. Your business’s success hinges on reaching the right audience at the right time, which is why the value of digital marketing cannot be overstated. However, if your company is new to digital marketing, it can take some time to identify your specific needs.

If you are planning your digital marketing strategy for the year, it’s important to know where to start. You can begin by assessing your digital marketing needs so that you can budget appropriately. Here are four steps to determine what your digital marketing needs are and how much budget you’ll need to meet them:

1. Assess the size of your target audience.

Organizations come in all shapes and sizes, and so do their audiences. Before you can set your digital marketing budget, you need to determine the size of your target audience. The size of your audience will affect your digital marketing budget. For example, if you’re a global brand with millions of customers, you’ll need a larger budget to reach all of those people. On the other hand, if you run a small business in one city and are trying to reach a specific age group, your total spend will be much lower.

2. Determine which social channels you will use.

Now that you have a good idea of the size and location of your target audience, you need to decide which channels you can use to reach them. For instance, nearly 40% of Gen Zers use platforms such as Instagram and TikTok to find answers to their questions or stay up-to-date on current events. If you’re hoping to target this demographic, you’ll need to allocate marketing spend for Instagram or TikTok ads.

3. Assess whether you will need outside vendors.

If your organization has a very small in-house marketing team with little digital marketing experience, you may need to hire a few vendors to hit your digital marketing goals. You might just need a graphic designer to create branded ads for your digital channels or someone to help place your ads and track performance. Alternatively, you may need a full-service digital marketing agency to execute your strategy. Outsourcing may cost more in the short term, but it could lead to a higher return on investment overall.

4. Take a look at what your competitors are doing.

Another way to gauge your digital marketing needs is to see what your competitors are doing. Take a look at content produced by businesses in your industry that are similar in size. What are they doing well? Have they seen an increase in clients or sales? Answering questions like this can help you decide what to do with your digital marketing strategy and budget.

If you are new to digital marketing, figuring out where to start can be difficult. However, once you nail down the size of your audience, the channels they prefer, and other factors, you can develop the rest of your strategy in a way that is sustainable and produces results.

Danny Shepherd is co-CEO of Intero Digital, a 350-person digital marketing agency that offers comprehensive, results-driven marketing solutions. Danny has more than 20 years of experience directing paid media strategies, optimizing SEO, and building solutions-oriented content and PR. He leads a team of experts in web design and development, Amazon marketing, social media, video, and graphic design.

For more insights and inspiration from today’s leading entrepreneurs, check out EO on Inc. and more articles from the EO blog