There are a lot of challenges businesses face, especially when it comes to generating leads and making sales. In fact, 61% of B2B marketers say that generating high-quality leads is their biggest challenge regarding lead generation. Fortunately, working with a digital marketing agency can provide some great search engine marketing tips, focus on local SEO, and help generate leads. But a frequently asked question by businesses of all sizes is about how much should be spent on digital marketing. To help answer this question, let’s take a deeper look into how to budget for digital marketing services.
Aspects To Consider When Creating A Digital Marketing Budget
First off, what should be included in your digital marketing budget? There is a wide variety of methods companies need to think about. In today’s society, some of the top digital marketing methods and elements companies should consider include:
- Search engine marketing
- Social media marketing
- Content marketing
- Video advertising
- Lead generation
- Marketing analysis
- CRM and Tracking Software
Of course, there are plenty of other marketing methods to consider, but these few methods should have more money allocated to them due to their importance.
Online Advertising Budgets Recommendations
As for how much companies should spend on digital marketing, that number can vary depending on a variety of factors.
According to the U.S. Small Business Administration, companies should allocate around 8% of their overall gross revenue for all of their marketing efforts.1 From there, today’s companies are using around 50% of their marketing budget specifically on digital marketing. Reports from eMarketer2 and Forrester3 Research found that in 2018, companies expected to spend about 41% of their marketing budget on digital efforts.
The reports from eMarketer and Forrester Research also found that when it comes to increased spending, the fastest growing digital marketing categories include online video and social media advertising.
All in all, companies need to find a balance between traditional marketing and digital marketing. And while traditional marketing may seem like it’s falling behind, it’s not really — digital marketing is just growing at a faster pace. This is important to keep in mind when divvying up budgets between traditional and digital marketing methods.
Your Industry Can Determine How Your Digital Marketing Budget Is Used
After determining your digital marketing budget with your own numbers, how do you know exactly where to spend this budget within your digital marketing strategy? The answer will depend on your business model and your company specifically. Not all businesses that market online need to have the same digital strategies in place. For example; local businesses that depend on foot traffic need to have a local SEO strategy that includes local listings, eCommerce businesses may not need local listings, but will need to take advantage of Google Shopping and Amazon.
In certain areas of your internet marketing strategy, your competition on Google Ads may determine how your PPC dollars will be spent. For example, if the cost per click is too high because of the competitiveness in your industry, you might not have a budget that can compete on the most appropriate words. Consider this list of the 10 most expensive keywords on Google Ads in 2019:4
- Business Services: $58.64/click
- Casino: $55.48/click
- Insurance $54.91/click
- Lawyer: $54.86/click
- Asset Management: $49.86/click
- Cash Services & Payday Loans: $48.18/click
- Cleanup & Restoration Services: $47.61/click
- Degree: $47.36/click
- Medical Coding Services: $46.84/click
When looking at the most expensive CPCs, it’s easy to see how a limited PPC budget will not get far in some cases. The alternative is to target your PPC budget towards long-tail keywords or another digital marketing strategy. These numbers are not to scare you away from Google ads. In fact, Marketing Magnitude does not have one client who’s campaign whose average cost per click is over $5. So keep pay per click advertising as a viable option until you have done the research.
We recommend working with a digital marketing professional to determine your online marketing needs. An expert can show you which areas of online marketing will work for your industry. And they can help you make the best use of your digital marketing budget to get results that you are looking for.
Budget For Strategies Unique To Your Company
In addition to each business type needing different aspects of digital marketing, each company will vary from its competitors. This means no two companies within the same industry will benefit from the exact same digital marketing strategy. Within the same niche, one company may have a celebrity staff member, another may be the go-to source for the latest research, another may have the best guarantee, etc. Every factor of an individual business will play into what areas of digital marketing will work the best. That is why it is imperative that your online marketing campaign is always in a live state of improvement. Keep a close eye on your digital marketing reports. Improve upon what works, cut things that definitely don’t work, and always keep an open mind to new ideas.
Keeping up with the live state of improvements in your campaigns, adjust your budgets to follow suit. Let’s say that your goal is to get more incoming leads. Let’s also say that you know that most of your leads come from organic traffic. With those two factors in mind, it makes sense to increase your digital marketing budget towards Search Engine Optimization. If you need to reach the most people as possible during the holiday season, you may want to increase your PPC display and Facebook ad budget during that period. One of the best parts of online marketing is its flexibility. Take advantage of the flexibility to change your online campaigns and modify your digital marketing budget as needed during different seasons of your business.
While marketing budgets can vary depending on overall company income, the size of the company, and additional factors, today’s companies should be allocating a good portion of their marketing budget to digital marketing. Working with an established digital marketing company will outline what methods will work best for your business, improve your performance and make the most of your budget.
If your company is looking for great search engine marketing tips, social media help, and easy market analysis, work with a local digital marketing agency like Marketing Magnitude.