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Learn to Create a Digital Marketing Budget for Your Small Business
It can be extremely difficult to run a small business. Small businesses often have a tight budget so it is important to distribute your budget in a way that does not neglect your business’s needs. It can be difficult to determine how much budget to allocate for digital marketing depending on your experience.
These tips will help you create or adjust your digital marketing budget.
The Rule of Thumb in Percentage
Every company is unique, so your digital marketing budget will be affected by many factors. There are some rules. B2B companies spend approximately 2-5% of their revenues on marketing. For B2C businesses, this figure is between 5-10%.
These guidelines should be followed with caution. There are many variations in the range and some items may not be within the range. The ranges should be used as a guideline, and you don’t have to follow them. These percentages can be used for any marketing campaign, not just digital.
This means that your non-digital marketing will be included in the 2-10% of your total revenue. Do you have radio ads or ads at bus stations? Or do you print flyers or in-store advertising. All of these should be taken into consideration.
Check out all the possible digital marketing expenses
Start by listing all expenses that you have, or will have. This will help you determine where your budget falls within the range of digital marketing budgets. Make sure you include any digital marketing strategies that you are not yet implementing but will use, such as local influencers. Here are the top potential costs you should consider:
- The website
- Advertising via social media
- Outsourcing social media management
- Online advertising, Google ads included
- PPC and SEO
- Email marketing
- Video marketing
- Content marketing
- Marketing by local influencers
- Brand development
- Training for all internal employees who will be handling digital marketing
Remember to consider all costs associated with each category. Your website design cost does not include the actual website creation. Hosting fees and domain fees are additional costs. Website maintenance and possible updates are also required.
Website-related advertising costs such as SEO are also included. These costs also apply if you hire someone to create a blog on your site.
Another example is social media. While we have already discussed paid ads and general social media management, you should consider other options. You should think about which social media pages you will be required to be present and then allocate a budget.
Take a look at your customers
Now that you have a list of possible expenses, it’s time to think about who your customers are. Which channels do they use? Which type of content is most appealing to them?
These answers will help you decide how much budget to allocate. Your budget will be allocated to the marketing channels and strategies most likely to produce results.
Set clear goals
Next, set goals for your digital marketing efforts. Your goals should be quantifiable, so you can track them. Instead of saying “get more website traffic”, say “get X number of website visitors per week.”
Take into account which tools you should use, even if they are free
Small businesses want to keep their digital marketing budgets as low as possible. There are many tools available that can assist with this. One example is Google AdWords Keyword Planner. Paying for tools can give you more features and resources than the free ones, but your business may not require them.
This is the time to decide what you will do in-house, and what you will outsource. Doing your digital marketing in-house can be more expensive than outsourcing. You will need to learn the ropes and may spend more time learning than you could. A lower ROI may also be possible. Before you decide whether to outsource certain marketing activities, it is important to weigh the pros and cons.
Keep track of the budget and results and adjust as needed
Like any other aspect of your small business, you shouldn’t be forced to adhere to a marketing budget for the long-term. Instead, evaluate your digital marketing performance and expenditures regularly. Compare your results with the baseline numbers from before you started using your new strategies.
You can increase your budget if you are not seeing the results you want. You can decrease your budget if your goals are met. If you’re not seeing results, reduce your marketing budget temporarily to see what works best.
B2B companies spend 2 to 5% on marketing while B2C businesses typically spend 5-10%. These figures are a guideline, but you should also consider your goals and possible costs. The most important thing is to regularly assess your marketing efforts and the results. If necessary, adjust your budget.