How Much Should You Budget For Digital Marketing?
In order to keep up with your competition and grow your business, it’s crucial to invest in digital marketing. The right digital marketing strategy can help you reach more customers, build a stronger brand, and generate more sales.
There are many different elements that come together to form a cohesive digital marketing strategy, such as a responsive website, Search Engine Optimization, Social Media Marketing, and search engine paid ads. Depending on your industry and goals, your specific digital marketing strategy may focus more heavily on certain elements.
Creating the most effective strategy and setting a budget that will properly support your strategy can be somewhat complicated. If you’re in a highly competitive industry, such as consumer products or retail, you may find that you’ll need to invest more in your digital marketing efforts to make an impact.
While developing a strategy and setting the right budget can be complicated, there are a few general rules of thumb you can follow to get started:
GOAL | Grow your business and gain market share
Growing your business through digital marketing will require an investment. In order to surpass your competition and reach more customers online, you will want to make sure you have a competitive budget. While your total budget may vary somewhat, a good rule of thumb is to plan on spending 10% of your business’s total revenue on marketing if you want to achieve growth.
GOAL | Maintain your current awareness and visibility
In some cases, you may not be in a position where growth is desirable. If your goal is to simply stay the course and maintain your current level of brand awareness and visibility, you may not have to invest quite as much in your digital marketing strategy. Consider starting with a budget that is about 5% of your business’s total revenue, and then make adjustments based on the level of performance you are seeing.
Your actual ideal marketing budget may vary based on factors such as your industry, location, seasonality, and how much your competitors are investing in their own marketing. As with any other component of your marketing strategy, it’s important to revisit your budget on a regular basis and determine whether adjustments need to be made. To make it easier to analyze your budget, be sure to work out all of the key details before you get started:
- Determine Your Goals. Setting some specific goals before you launch any digital marketing campaigns will help you focus your efforts and spend your budget more wisely. Make sure you are working closely with the team who will be creating and implementing your digital marketing strategy to ensure that everyone is on the same page about what you hope to accomplish.
- Create Your Strategy. Once you have set some goals, you can start mapping out a strategy to help you accomplish them. A solid strategy will help you reach the right audience at the right moment, and increase the odds that you will get tangible results from your marketing efforts.
- Measure Your Results. Beyond knowing what your goals are and how you will try to reach them, you should also come up with a plan for measuring and monitoring your results. Using free tools like Google Analytics, you can track specific actions on your website and learn more about how users are finding and interacting with your site. By having your tracking in place before launching your strategy, you can more accurately measure the impact of your efforts.
- Make Adjustments As Needed. Monitoring the performance of your various digital marketing efforts will help you more easily determine what is working and what isn’t. You will be able to find which areas might need improvement or would benefit from additional funds. By making these adjustments as needed, you can refine your strategy, avoid wasted spend, and make educated decisions about your ongoing budget.
The right plan and budget will help you implement a more successful digital marketing strategy for your business. While there is no one-size-fits-all solution, sticking to these general rules can be a great way to get started. If you need help creating a digital marketing strategy for your business, contact our team. We can create a strategy tailored to your specific goals, and work with you to set an effective marketing budget. Contact us today to get started!