Business Marketing Budget: How Much Should Go Towards Online Marketing? Jennifer Christopher The amount a business should spend on online marketing, also called digital marketing, per year varies depending on several factors, such as the industry, target audience, business size, and marketing goals. Despite the differences within these factors, businesses should allocate a portion of their overall budget for marketing efforts, about 20% of their revenue, no matter the size of the business. Marketing Budget: The 20% Rule and Online Channels As online digital presence grows and continues to make a critical positive impact in reaching customers, a large percentage of the overall marketing budget should be spent on online channels. Online channels include social media, search engine marketing, and paid display advertising. Businesses that spend within online channels:💻Improve their online presence💻Increase their website traffic💻Generate leads💻Drive salesWhy Online Marketing? One of the main advantages of digital marketing is that it allows businesses to track and measure their marketing efforts in real time. This means that businesses can monitor the effectiveness of their campaigns and make adjustments as necessary as needed to optimize their ROI.A couple of examples: One common tactic in digital marketing is pay-per-click advertising (PPC), where businesses pay each time someone clicks on one of their ads. PPC can be more expensive than other tactics, such as social media marketing or email marketing, but it can also provide a higher ROI if done correctly. Businesses can monitor the performance of their ads, including the click-through rate (CTR) and conversion rate. If they notice that certain ads are not performing well or not generating the desired results, they can adjust the ad copy, targeting, or bidding strategy to improve performance and maximize their ROI. Adjustments based on performance monitoring allow ads to be shown to people who are most likely to be interested in their product or service. Social media marketing involves promoting a business or product on social media platforms such as Facebook, Instagram, or Twitter, while email marketing involves sending promotional emails to a list of subscribers. Businesses can use analytics tools to track the performance of their social media marketing campaigns. They can analyze metrics such as engagement rates, website traffic, and conversion rates to determine which campaigns are driving the most value and adjust their budgets accordingly.Online Marketing Strategy Factors Business Goals Factor in the specific objectives and targets your business wants to achieve. If a business’s primary goal is to increase brand awareness, online marketing should focus on social media advertising and content marketing. If a business’s primary goal is to generate leads and drive sales, online marketing should prioritize paid advertising and email marketing. In order to develop an effective digital marketing strategy that aligns with business goals, it’s important to define specific, measurable, and achievable objectives. These objectives should be based on key performance indicators (KPIs) such as website traffic, conversion rates, and customer acquisition costs.Target AudienceExamining the specific characteristics, needs, and behaviors of a target audience helps not only to develop the appropriate personalized messaging to speak directly to interests and pain points but the tactics within certain online channels. Targeted email marketing and personalized web content are a couple of examples of ways a target audience can be reached.Competitive LandscapeExamining the data of competitors can determine how a business positions itself online and help it compete for visibility and engagement with its target audience. Keyword use and page content resonate with audiences, and it’s critical to see what the competition has optimized and create a strategy that mirrors these efforts. How Can A Digital Marketing Agency Help? When spending marketing dollars in online channels, a valuable investment for businesses is hiring a digital marketing agency. Most digital marketing agencies work with businesses of different sizes and industries and can provide valuable insights into where to best spend marketing budget dollars and within budget. Expertise and Experience: Digital marketing agencies specialize in online marketing and have a team of experts who are knowledgeable in various areas such as SEO, PPC advertising, social media marketing, email marketing, and content marketing. Businesses can leverage the agency’s expertise and experience to develop and execute effective marketing strategies.Cost-Effective: Outsourcing digital marketing to an agency can be more cost-effective than hiring an in-house team Businesses can avoid the costs associated with hiring, training, and managing employees and can instead pay for the services they need on an as-needed basis.Scalability: Digital marketing agencies offer a wide range of services and can adapt to the changing needs of a business. They can scale their services up or down as needed, which is helpful for businesses that experience fluctuations in their marketing needs throughout the year.Access to Tools and Technologies: Digital marketing agencies have access to a variety of tools and technologies that can help businesses improve their marketing efforts. For example, they may use software to analyze website traffic or manage social media accounts, which can lead to more effective marketing campaigns.Objectivity and Perspective: Digital marketing agencies can provide an objective perspective on a business’s marketing efforts. They can offer fresh ideas and new approaches that a business may not have considered before and can help businesses stay up-to-date with the latest trends and best practices in digital marketing.In Conclusion As a general rule of thumb, 20% of business revenue should be spent on the marketing budget, with a large portion within online channels. A digital marketing agency can help with the allocation of an online budget as an authority on which tactics perform best and have the greatest ROI for the particular strategy a business chooses to follow. Perhaps there are questions as to which strategy your business should start with. Maybe which KPIs to measure? Let Site-Seeker help you create a strategy, determine your marketing budget, identify your most important KPIs, and hit the ground running.