As a small business owner, you may wonder how to create a digital marketing budget that works for your company. There are a few things to consider when planning your budget.
Business revenue allocated to marketing budgets has grown over the past 12 years, reaching 13.8% of overall company revenue in 2022. That's a 5% increase since 2011.
According to a survey of 85 small business owners and marketers, 52% spend between $5 and $15,000 on monthly marketing efforts.
With that in mind, how much should you spend on your digital marketing each month?
You should base your digital marketing budget on the following factors:
- Your business goals
- Your target market
- Your available resources
Once you have a clear understanding of these factors, you can begin to allocate funds toward specific digital marketing channels.
For example, if your goal is to increase brand awareness, you may want to invest in paid advertising.
Alternatively, if your goal is to generate more leads, you should focus on content marketing and SEO.
No matter what your specific goals are, there are a few general tips that can help you create an adequate digital marketing budget:
- Start small and gradually increase your budget as you see results
- Be realistic about what you can achieve with your available resources
- Don't be afraid to experiment with different channels and strategies
- Track your progress and adjust your budget accordingly
Why You Need A Digital Marketing Budget
Digital marketing is essential for any business that wants to remain relevant in today's digital world.
A solid digital marketing strategy can help you reach new customers, engage with your existing customer base, and build a robust online presence.
However, digital marketing can be a costly endeavor. To ensure your digital marketing budget is adequate, you must carefully consider your goals, target audience, and the best way to reach them.
Here are four reasons why you need a digital marketing budget:
1. Digital Marketing Helps You Reach New Customers
With a well-executed digital marketing strategy, you can reach new customers interested in what you offer.
By targeting specific keywords and phrases, you can ensure your website and other online assets are visible to people actively searching for products or services like yours.
2. Digital Marketing Helps You Engage With Your Existing Customer Base
Digital marketing isn't just about reaching new customers; it's also about engaging with your existing customer base.
You can inform your customers about new products and services, special promotions, and more through targeted emails, social media campaigns, and other digital channels.
3. Digital Marketing Builds A Strong Online Presence For Your Business
A solid online presence is essential for any business that wants to be successful in today's digital world.
Investing in digital marketing can build a website that attracts visitors, establish a solid social media presence, and create content that engages your audience.
4. Digital Marketing Helps You Stay Ahead Of The Competition
Investing in digital marketing is essential for any business that wants to remain competitive and relevant today.
A well-planned digital marketing budget will help you effectively reach new customers, engage with your existing customer base, build a solid online presence, and stay ahead of the competition.
How To Create A Digital Marketing Budget
Assuming you know what you want to spend your marketing budget on, the first step is creating a budget template. You can find a free marketing budget template online or create your own in Excel.
Once you have your template, the next step is to populate it with actual numbers. You'll need to research your target audience, your competition, and your marketing goals to do this.
With this information, you can estimate how much you'll need to spend on each marketing activity.
For example, if you plan to run a social media campaign, you'll need to consider the cost of creating content, boosting posts, and running ads.
If you plan to build a new website, you'll need to factor in the price of domain registration, hosting fees, and website design.
Once you've estimated each activity's cost, add all the costs to get your total digital marketing budget. Remember to include a buffer for unexpected expenses!
What's Included In A Digital Marketing Budget?
When creating a digital marketing budget, there are many factors to consider.
The most important factor is your goals. What do you hope to achieve with your digital marketing campaign?
Once you know your goals, you can begin to allocate funds accordingly.
Here are some everyday items that you should include in a digital marketing budget:
- Website Design or Redesign
- Search Engine Optimization (SEO)
- Pay-per-click (PPC) Advertising
- Social Media Marketing (SMM)
- Content Marketing
- Email Marketing
- Digital Advertising
- Video Marketing
- Analytics and Tracking Tools
- Mobile Marketing
- Reputation Management Services
- Consulting Fees
How To Stay Within Your Digital Marketing Budget
Assuming you have a limited amount of money to spend on digital marketing, you can stay within your budget in a few ways.
- Consider what platforms you want to use for your marketing campaigns. Each platform has different costs associated with it, so choose wisely.
- Next, create a realistic timeline for your campaigns. If you try to do too much too quickly, you will likely blow through your budget.
- Finally, track your results to see which strategies work and adjust your budget accordingly.
By following these tips, you can stay within your digital marketing budget while achieving your desired results.
Defining Your Objectives
The first step in creating a digital marketing budget is to define your objectives.
- What are you looking to achieve with your digital marketing efforts?
- Do you want to increase brand awareness?
- Drive traffic to your website?
- Generate leads or sales?
Once you know your goals, you can start planning how much you need to spend to reach them.
You must focus on social media and content marketing strategies to increase brand awareness.
These activities typically don't require a large budget, but they do require time and effort.
Paying to advertise may be a good option if you want to drive website traffic.
You can also consider search engine optimization (SEO) to help improve your website's organic ranking in search engines.
And if you want to generate leads or sales, lead-generation campaigns and e-commerce solutions can be effective options.
No matter what your objectives are, many digital marketing channels can help you reach them. The key is determining which will work best for your business and ensuring your budget aligns with your goals.
Determining Your Audience
Before creating a digital marketing budget, you must first determine your audience. Whom are you trying to reach with your marketing efforts?
You need to know your target audience to create an adequate budget.
To determine your audience, start by thinking about your product or service. Who will be most interested in what you have to offer?
Once you have a general idea of your target audience, you can begin narrowing down your focus.
Think about the demographics of your target audience.
- What is the age range?
- Where do they live, and what is their income level?
- What are their interests?
The more specific you can be when defining your target audience, the easier it will be to create a budget that reaches them.
Once you identify your target audience, you can think about how to reach them.
- What kind of digital marketing channels will be most effective in reaching them?
- Do they spend time on social media?
- Are they likely to search for information online?
Knowing how your target audience consumes information will help you decide where to allocate your budget.
Researching Your Competitors
When creating a digital marketing budget, one of the most important things to do is research your competition.
The research will give you a good idea of what they are spending on marketing and what strategies are working well for them.
You can use this information to create a budget that will allow you to compete effectively.
There are several ways to research your competition.
One is to search for them online and see what comes up.
Another is to attend industry events and trade shows and talk to people in your field.
You can also look for press releases and articles about their marketing campaigns.
Once you have gathered this information, you can create a budget that will work for your business.
Remember to consider your goals and objectives and the size of your company.
With careful planning, you can create a digital marketing budget to help you succeed.
Evaluating Your Current Strategies
The first step in creating a digital marketing budget is to evaluate your current strategies to help you determine where you are spending your money and whether or not it is effective.
There are some questions you should ask yourself when evaluating your strategies:
- What platforms are you using?
- Are you targeting the right audience?
- What type of content are you creating?
- Is your content engaging?
- Are you trackings results?
If you need help answering these questions, consider hiring a digital marketing agency to help you assess your current strategy.
Planning Your Budget
When it comes to digital marketing, one of the most important things you can do is plan your budget.
Planning will ensure that you have the funds available to cover all of your necessary expenses and also allow you to save up for any unexpected costs.
To start planning your budget, you must determine how much you spend on monthly digital marketing.
Once you have this figure, you can allocate funds to different areas such as website development, content creation, social media advertising, and email marketing.
It is important to remember that your budget may fluctuate from month to month, so it is essential to review and adjust it regularly.
Additionally, set aside some funds for unexpected costs such as a sudden drop in website traffic or increased competition.
Implementing Your Plan
Assuming you've already read and followed the advice from the previous section, you should now have a good idea of your digital marketing goals and how much you'll need to budget to achieve them.
Let's get into the nitty-gritty of how to implement your plan.
The first step is to look at your overall marketing strategy and break it into smaller, more manageable pieces.
For example, if your goal is to increase brand awareness, you must consider which tactics will most effectively achieve that goal.
Once you understand all the moving parts, you can assign dollar amounts to each element.
Next, it's time to track your actual results against your budgeted goals.
Tracking will help you change course and ensure you're on track to hit your targets.
Finally, remember to revisit your budget periodically and make adjustments as needed.
As your business grows and changes, so will your digital marketing needs.
Monitoring and Adjusting Your Plan
As you create your digital marketing budget, keeping track of your progress and adjusting your plan as needed is essential. Here are some tips for monitoring and adjusting your digital marketing budget:
- Keep track of your leads and conversions to help determine whether your digital marketing efforts are paying off.
- Adjust your budget based on your results. If you do not see the desired results, consider increasing your budget or reallocating funds to different channels or strategies.
- Monitor changes in the market. Keeping an eye on trends will help you adjust your budget accordingly. For example, if you see a decline in organic reach on Facebook, you may need to allocate more funds to paid advertising.
- Review your goals regularly. Make sure your digital marketing budget aligns with your business goals. As your plans change, so should your budget.
By following these tips, you can ensure that your digital marketing budget is adequate and helps you achieve your desired results.
Creating a digital marketing budget for 2023 can help you stay ahead of the curve and ensure you prepare adequately to meet your business goals.
You can accurately measure your campaigns' success and better allocate future resources by outlining a detailed budget that includes all your projected expenses and potential investments in new technology or channels.
With careful planning and an understanding of what you want to achieve, creating a digital marketing budget for 2023 will help ensure that the upcoming year is filled with growth and opportunity.
Let Binary Glyph Help You Plan Your Digital Marketing Budget
Talk to us today to get started on your journey toward success with affordable digital marketing this year. Our team of experts will help you determine the perfect budget for achieving your desired goals so that you can focus on other aspects of running your business while we handle the rest.