Digital Marketing Budget Allocation Tips
Virtually all Americans now own a cell phone and 85% of them own an internet-connected smartphone. That figure stood at just 35% as recently as 2011. This surge in online access provides businesses with new and exciting ways to connect with their customers, and it has made digital outreach a crucial part of any effective marketing strategy.
Most companies spend about 10% of their revenues on marketing and promotion, and many of the world’s most successful businesses devote about half of this money to digital outreach. They do this because digital marketing allows them to engage with rather than just speak to their target audience, and it can produce impressive results when done right.
How Much Should I Allocate for a Marketing Budget?
The amount that you should spend on marketing will depend to a large extent on whether your company is established or in its nascent stages, and this is especially true when it comes to digital outreach. An attractive and performance-based website costs far more to build than it does to maintain. Additionally, host and advertising budgets also tend to be higher when businesses are trying to carve out a place for themselves.
An established business should spend between 5 and 10% of their sales revenue on marketing and promotion, but that figure could rise to 20% or more for companies that are just starting out.
Where digital marketing budgets are spent is just as important as the amount of money allocated for these efforts. Many companies have moved away from search engine optimization in favor of social media in recent years, but the figures suggest that this could be a major mistake. Almost one in three Americans search for small businesses on Google every day, and organic search accounts for 53% of all website traffic. That is more than 10 times the amount of traffic social media produces.
How Much Should I Budget for Digital Marketing?
The answer to this question will be greatly influenced by the way a company does business. An online retailer should spend more on digital marketing than a brick-and-mortar store, but just about any business can attract new customers and generate additional sales by devoting some of their advertising dollars to digital marketing.
Once you have figured out your budget, your next job will be determining how the money should be spent. Businesses that are successful on the internet tend to use their digital marketing budgets in three ways. They build and improve their online infrastructure, devote funds to marketing efforts that work today and invest in strategies that are likely to bear fruit in the future.
Infrastructure
You may think that your website is attractive and contains all of the information that potential customers will be looking for, but is it optimized for performance?
Large images, coding errors and plugins can slow page loading times to a crawl, which can have a huge impact on results.
Website visitors click on an average of 8.9 pages when loading times are about two seconds, but that figure drops to only 3.3 pages visited when loading takes eight seconds. Once your website is up to speed, you should make sure that your content is engaging, your tags and titles are optimized for organic search and you have some sort of call to action like a newsletter signup option.
The Here and Now
The best ways to attract new customers on the internet today are organic search and pay-per-click advertising.
Pay-per-click is particularly attractive because you are only charged when a prospect shows an interest. However, pay-per-click programs can be complex and confusing to those not familiar with them, and even minor missteps can be expensive.
This is why it is always a good idea to consult with experts before launching a pay-per-click campaign. There are many pay-per-click options out there, but it may be wise to follow the herd and spend most of your money with Google and Facebook. These two companies pioneered pay-per-click advertising, and together with Amazon, control just under 70% of the digital advertising market.
The Future
You should devote about 10% of your digital marketing budget to staying one step ahead of your competition by investing in new strategies that will become mainstream in the years ahead.
Many experts believe that consumers will soon be conducting most of their searches using devices like Amazon’s Alexa and digital assistants like Apple’s Siri, so investing in voice search today could be an approach that pays off handsomely in the future.
What Is a Good Marketing Budget for a Small Business?
Only you can answer this question, but about 10% of your revenue with about half of that spent on digital marketing is a good starting point.
Just as important is where you spend the money and who you choose to help you develop and refine your online marketing efforts. The experts at GYBO Marketing have decades of experience helping businesses of all sizes to reach their online goals, and they could help you to avoid the pitfalls many entrepreneurs stumble into when they enter this rewarding but challenging arena.
Passionate digital marketing expert with over 10 years of experience. Broad, hands-on marketing skillset, from web developer, SEO, PPC, Data Analytics & Tracking.