“How much should we spend on digital marketing in 2019?” We hear this question frequently from owners of businesses of all sizes. There’s a ballpark quick-and-dirty answer, but that may or may not apply to your business.
A Quick-and-Dirty Estimate for Your Digital Marketing Budget
Startups typically spend up to 20% of revenues on marketing. Well-established companies in local markets may spend comparatively little. The most important point to keep in mind is that you need a marketing budget based on more than whatever is left over after the utilities, payroll and other expenses are paid. Even the best products and services won’t sell themselves.
For businesses with revenues of $5 million or less, the Small Business Administration recommends a marketing budget of 7-8% of revenues. This money would be split between branding activities and promotions (advertising, campaigns and so on). This recommendation assumes margins of 10%-12%. A company with lower margins might spend more on marketing.
$2 million revenues = yearly marketing budget of $140,000 to $160,000
Digital Marketing Budgets are Increasing Every Year
In 2019, digital marketing should account for about 50% of your marketing budget. From the example above, if you had $2 million in revenues, you’d spend about $70,000 to $80,000 on digital marketing.
In 2020, plan on spending about 55% of your marketing budget on digital marketing. Many tech-savvy businesses spend substantially more on digital marketing.
How much overall are companies today spending on digital marketing? Only about 35% of typical marketing budgets is spent on digital marketing. That’s the recommended percentage from three years ago, not nearly enough to remain competitive in today’s dog-eat-dog online marketplace.
You Need a Digital Marketing Strategy
Developing an overall strategy is critical. Otherwise, you’ll run out of money long before you run out of year. “It’s incredibly important to be forecasting ahead and making sure you have the right digital strategy,” says Ignite Visibility CEO John Lincoln. That doesn’t mean your budget has to be inflexible and set in stone. The unexpected will happen, but you need a plan.
A great YouTube ad will do great things for your bottom line. However, you have to grab the viewer’s attention in the first 5-10 seconds or they’ll dump your ad and move on.
Let the viewer know immediately you’re providing information they really want, hook them with humor or stand out from the pack in some other way. Do this in 10 seconds or less. It’s not easy, but the potential payoff is worth it.
SEO (Search Engine Optimization)
If you’re serious about your business and being highly ranked for your keywords, you need SEO. It takes work to achieve the top spots and more work to stay there, but it will bring you traffic and targeted leads. At BXP Creative, we’re passionate about SEO.
Facebook and Google Ads
Facebook and Google are both great places to advertise, but they aren’t the same. The primary difference is consumer intent. We discussed this in a recent blog: Google Ads vs. Facebook Ads: Which is Better?
Fresh, authoritative, optimized content, both written and video, is invaluable. Provide blogs, how-to pieces and other resources.
With social media, you need to go where your customers are. Find the best platforms for your niche or industry and remain active and responsive. Teaming up with a local Instagram influencer, for example, can be a successful tactic.
Some Great Digital Marketing Tools
You need tools to track results and perform many valuable functions, but don’t buy every tool that sounds like the latest-and-greatest. It’s a budget-buster. You can test out many of our favorite tools with a free trial and then decide if you want to keep it or upgrade. Bottom line: It’s better and much cheaper to become really proficient with three or four tools than be barely competent with many tools.
Ahrefs: Six tools track backlinks, find competitors’ keywords, SEO check and much more. 7-day trial for $7.
Buffer: Schedules social media posts, can handle many accounts. Free trial.
Crazy Egg: Provides heatmaps showing where users click, how far they scroll and more. Free trial.
GetResponse: Great email marketing tool and more. Free trial.
Hello Bar: Collects emails with a little bar at top of website. Free trial.
Screaming Frog: Popular easy to use SEO web crawler. Worth having. Free or paid.
At BXP Creative, we love what we do. We love difficult challenges, impossible deadlines and out-of-the-box solutions that save money and time. Check out our case studies for examples of our work. We respect our clients’ budgets.
How can we help? Tell us about your problem or call (267) 908 7841.