How to allocate Digital Marketing Budget for Your Business?

Target the eyes

target the eyes

Desire! That is what basically drives the consumer markets. How do we get there? The entry door is primarily the eyes. It is the eyes that feed information to the mind and emotions to the heart. These work in conjunction to produce desire. The stronger the desire, the surer we are that the person will follow through to fulfill our business objective.

This explains why marketing needs to focus on catching people’s eye and their attention. The impressions thus formed are the first steps towards realizing business objectives.

However, this also means that we need to plan our marketing strategies in line with where people focus their eyes. They cannot desire something they do not know of or have not seen.

Move out of the closet to the roadside

move out of the closet to the roadside

Gone are the days when newspaper advertisements and fliers did the job. The dot-com generation of today spends a large amount of their time with their heads down and fingers running, either on a computer or a mobile device. And that is where we need to be to catch their attention, on the digital screens.

More than half the world’s population is online and studies mention that they spend an average of more than six hours using the internet. The figures go up substantially in developing and developed countries.

Having a digital marketing strategy is like moving out of the closet to the roadside as far as visibility is concerned.

Digital marketing budget percentage

digital marketing budget percentage

Businesses often ask – What should be our digital marketing budget allocation, or what is involved in budgeting for digital marketing? There is no simple answer to this question. A digital marketing budget development plan would include working out which aspects of digital marketing would best serve the purpose. It is good to have a well-executed single aspect of digital marketing than a wide range of poorly executed digital marketing strategies. Including a budget for a digital marketing agency in your digital marketing budget strategy will ensure you have the help you need.

The budget allocation for digital marketing would depend on the kind of business it is. Generally, B2C businesses spend more on marketing than B2B businesses. Service providers spend more than product suppliers. Most researches broadly state that 5 to 15% of your total revenue should be allocated for marketing and 10 to 50% of that should be digital marketing budget allocation depending on the type of business you are in.

Budgeting for digital marketing is not rocket science, but it does involve a lot of spadework. A number of factors need to be considered, and many things kept in mind. We take a little time to discuss these key aspects of a digital marketing budget strategy to help your business grow.

How to budget for digital marketing – small business

how to budget for digital marketing – small business


A recommended digital marketing budget estimate for small and medium business is 12 to 20% of their profits towards marketing. The larger chunk of this, which is 40 to 45%, should be earmarked for digital marketing. The specific digital marketing budget percentage depends on the kind of business and other factors discussed further in this article.

  • Studies show that most small and medium businesses in the United States spend an average of USD 400.00 on marketing each month and 46% of that amount is budgeting for digital marketing spends.
  • Often small businesses have to spend a higher percentage on internet marketing budgeting compared to larger and better-established companies. Larger companies have an existing brand image and can draw on the marketing of yesteryears, and thus need lesser to keep the ball rolling or even to increase momentum. They are also better able to analyze marketing strategies and focus on the more productive ones better. That is what small and medium businesses should aim for.
  • Rather than spending a large amount of money, it is suggested that the budget be wisely used to ensure that every move counts, with quality advertising. Thus, over a period of time, you will be able to grow.

How to budget for digital marketing – start-ups

how to budget for digital marketing start-ups

A start-up needs to spread the word and be known, and hence digital marketing is more critical for these businesses. They need to ensure that their internet marketing budgeting results in a digital presence that adds value to the business, as well as builds a fine digital footprint.

  • Once again the factors discussed in this article would assist start-ups to decide on their budget for digital marketing. Start-ups are generally stretched thin with their resources and hence need to ensure that every penny spent is worth it.
  • For a start-up, it is important to convert each contact into a lead. Good website design will include elements that would obtain the visitors’ contact details for you to follow up.
  • Start-ups with a low digital marketing budget estimate can use your limited resources to target selected channels of digital marketing and do them well as it will provide you with more results than doing a sloppy job across a number of channels. At this point, it is good to ensure that there is a budget for a digital marketing agency in your internet marketing budgeting.

How to budget for digital marketing – no budget

how to budget for digital marketing – no budget

If you are a start-up with no budget for digital marketing you can still accomplish much. There are channels that are free or cost a pittance that could be utilized. First, give serious thought to which channel to use. Ensure that your tone is in accord with the product you are marketing. Work out a logo and a marketing plan. Use social channels such as Facebook and Twitter, as well as email advertising. Keep your page up-to-date with fresh content periodically. Have a newsletter so that you can organically increase your e-mail listing. You could also reward loyal followers as it will ensure a wider reach.

As your business grows you could start setting aside funds for a digital marketing budget strategy.

How to split the digital marketing budget

how to split the digital marketing budget

When we talk about how to plan a digital marketing budget we need to consider the different aspects of digital marketing. A clear understanding of these will help you with your online marketing budget breakdown.

How much of these channels and which of these aspects would be utilized for digitally marketing a particular product depends on how you work it out. This influences the digital marketing allocation and determines how wide the net would be that could attract potential customers. You are able to work out your digital marketing budget breakdown depending on which aspects you wish to focus on.

Digital marketing budget plan

digital marketing budget plan

How to plan a digital marketing budget percentage? Keep in mind the following steps with regard to planning your internet marketing budgeting. This will also help you work out your digital marketing budget estimate.

  1. Know your objectives and goals – Most businesses have the primary goal of increasing sales and thus boosting revenue. This can be achieved by following through on a number of goals. Perhaps current customers have to be retained, new customers have to seek out, and those showing interest should be converted into actual customers. Having clearly in mind your objectives and goals is the first step towards planning to go digital. This will also help you decide what campaigns you will be running and how much your keywords would cost for PPC purposes.
  2. Know the current market – A thorough knowledge of the current market trends as well as a clear understanding of the marketing strategies of your competitors is essential. See what works for them and what doesn’t and learn from them. Try to not just match up with what they do but outdo them.
  3. Channelize – How to split digital marketing budget? Consider: Who is your target audience? Whom are the products or services you provide primarily meant for? Are they primarily male or female? What age group do they belong to? What would catch their eye and hold their attention? Which aspect of digital marketing would reach the maximum number of those in the target group? The answers to these questions along with knowledge of your objectives and goals will help you decide on which channels you would best benefit from and work out your online marketing budget breakdown. Channelize your resources to focus on these particular aspects of digital marketing.
  4. Know what to target – You need to realize that on top of the marketing funnel are the ones aware of the product or services offered. It narrows down to those who are considering obtaining the item or service. It then further narrows down to those who have given serious consideration and perhaps shortlisted your product or service. Finally, there are those who come through with the purchase. It is good to assess where the maximum reduction in potential customers is taking place in the funnel and then target those steps in digital marketing.
  5. Review – Ensure that you review your website content every couple of years. Use SSL certificates to make your website secure. (https instead of HTTP) All your advertisements should have at least one analytics tool to allow for future review. Analyze the expenses of your previous year. Which channels were successful and why? Which aspects did not work and why? Focus on those that worked, work out your online marketing budget breakdown accordingly. Decide on whether to leave out the channels that did not work or improve on them. It is good to try out new channels as well, in fact, most businesses reserve a considerable percentage of funds for this purpose.
  6. Location marker – Have your location clearly marked on the digital world so that customers can find it. For many, it would mean lost business if customers are unable to locate them.
  7. Mobile advertising – With the increasing use of mobile devices ensure that whatever online presence you have is also tailored for mobile devices in a manner that allows for comfortable user experience.
  8. Advertising trends – While online marketing with its various channels is gaining momentum most traditional forms of marketing are slowing down including radio and television marketing.
  9. Keep in mind the need to be consistent in your message irrespective of which form of advertising you choose to spend your money on. Remember that your advertisements are a reflection of your organization. Therefore ensure quality. It is better to have fewer but good quality advertisements than many low-quality ones. Slow websites are a turn-off and optimum speed should be ensured for both computers and mobile devices.

Digital marketing budget development – facts to be kept in mind

digital marketing budget development – facts to be kept in mind

The answer to how to plan a digital marketing budget would require keeping the following in mind.

  • The budget allocation for digital marketing has steadily increased during the past ten years and will continue to increase while the budget for traditional marketing including TV and radio advertising is now on the decline.
  • It is predicted that spending on social media marketing will substantially increase over the next year or so.
  • Another channel that is set to increase drastically in the coming years is mobile marketing.
  • Most companies are spending a lot on Search Engine Marketing (SEO and SEA) with online advertisements taking the next place.
  • Email advertising has yielded the best results for a number of companies with social media coming close behind it. Of the many social media sites, Facebook still continues to dominate making it the best platform to advertise.
  • Many businesses are increasing their spending on PPC with Google and Facebook being the most successful platforms.

Adding creativity, while increasing costs, works out well both in the short run and in the long run. Creative ads engage the viewer and produce results. On social media, these can generate likes and shares which greatly enhance the ROI on the marketing strategy.

Help with the move

help with the move

Having an online presence or a digital presence is a complex process. While we might desire to try handling digital marketing in-house in an effort to save funds, there are many benefits of outsourcing digital marketing. Key among them is the fact that they serve as a coach by our side guiding and directing the process of not just a digital presence but also digital marketing budget development.

A successful digital marketing program requires close coordination and cooperation of a number of experts in different fields. Trying to do all that on our own will result in an amateurish presentation online, which would hardly serve to further our business interests. On the other hand, a good digital marketing agency will help you smoothly and seamlessly move from the closet to the roadside, so to speak, and ensure that your visibility is aesthetic, capturing attention. Hence ensure that your digital marketing budget estimate includes a budget for a digital marketing agency.

Role of the movers

role of the movers


What should you expect from digital marketing agencies as we move out of the closet to a more visible digital presence? Remember, the bigger the net, the greater the catch. They should be able to plan and execute programs to spread the net and ensure larger visibility.

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