The Importance of Digital Marketing
When a company runs into some financial challenges and is looking to cut costs, one of the departments they will look at is marketing. The reasoning is that you already have a customer base, and so you will still be able to sell products or services. However, marketing is not a luxury that should only be considered when the company has money. One of the roles of marketing is reminding people that you are still operational. Keep in mind that your competitors will not stop advertising themselves. And when you are no longer reminding people of your existence, they start buying products and services from your competitors.
Factors Affecting Your Budget
As mentioned earlier, marketing budgets will always vary from company to company. Here are several factors that will determine how much you spend.
- The business’s size: For small businesses, you have not been in the game for long, meaning your budget is small compared to large corporations. However, if you want to retain your position in the market, allocate about 5 to 7% of your revenue to digital marketing. On the other hand, if you are looking to grow your market share, be ready to part with at least 7 to 15% of your revenue on digital marketing.
- The strategy being used: The strategy you want to use can also determine how much you are willing to spend on marketing. Some strategies are aggressive, producing better results, but they also require a good amount of cash. For instance, if you decide to go with paid advertising, be ready to allocate some of the revenue to it.
- Working with an agency or with an in-house team. Most companies are all about outsourcing nowadays. It reduces the hassle of hiring an in-house team. If you plan to outsource a marketing team, expect to pay more as they come with expertise. Ensure you work with a marketing agency with a successful track record.
When it comes to your digital marketing budget, look at what will help you achieve your goals. Maybe your goal is to outrank your competition for certain SEO phrases. That means you want to rank among the top search results to increase traffic to your website. To achieve this, you will have to allocate part of your budget to SEO. You can buy SEO backlinks to help boost your site and save time.
Does a Bigger Budget Reflect Better Results?
Small business owners may feel insignificant when competing with large corporations with better financial muscle. Every marketing platform you turn to, large companies seem to be dominating. However, you should also know that bigger budgets do not always win. Digital marketing goes beyond the money. It is choosing the right strategy, investing in quality content, identifying your target market, etc. Be wise about how you spend money. In addition, a small business comes with flexibility. In case you spot particular customer pain points, you can easily adapt and give customers what they want.
Be Realistic About Your Budget
Do you have $5,000 to spend on paid advertising? If you do, then go for it and continue growing. However, sometimes, businesses do not have the amount needed to spend on digital marketing to make the desired impact. It is good to ask yourself how much money you can comfortably spend on marketing without crippling other areas. Setting a budget you cannot sustain will only do your company more harm than good.
Ultimately, the amount to spend on digital marketing will be determined by other things. Marketing is always a good way to earn more customers and increase sales. So, whenever you are coming up with your company’s budget, allocate a good amount of money to digital marketing.