What should my digital marketing budget be?
This is the first question we get asked as an agency. The truth is, there is no straight answer. All companies and industries are different with unique goals.
Experts say you should calculate your company revenue and spend a % of that on marketing.
New companies should spend at least 12% – 20% of their gross profit and established companies 6% – 12%. New companies must first establish their brand in the market. This requires more budget.
During tough times, we know that these numbers are not always achievable. So we recommend that you only spend what you can afford!
Utilising your digital marketing budget
You need to have a budget strategy. Establish which platforms your target audience uses. Then decide how much you are willing to spend on each platform to capture them at the right time.
Let’s take an example. You are a B2B company targeting decision-makers of big organisations. They are not searching for your type of product at the moment.
You need to expose your brand to them so that when they do need your product or service, they know where to find you.
The best platform to find this very specific consumer would be on LinkedIn. Targeting job titles on LinkedIn is quite expensive so a good budget strategy would be to use the platform for initial contact only and then retarget them later on more affordable platforms such as Facebook.
B2B organisations should also focus on long-term organic results and growth. Include SEO, amongst others, in your strategy.
As you can see, a budget strategy will be very different to each organisation based on their goals.
Other things to consider
- Your marketing budget strategy should always be dynamic based on your ROI (Return On Investment)
- You can make use of a budget forecasting calculator from Hubspot
- Figure out what your true CPA (Cost Per Acquisition) is and set realistic expectations
- Keep a close eye on your competition
Reaching your goals does not always mean you have to spend more than your competitors. A comprehensive digital marketing strategy with a detailed budget goes a very long way! Get in touch with us for a free consultation and let’s help you reach your goals.