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How Much Should Small Business Spend on Digital Marketing

A common question among our clients is how much they should be spending on digital marketing. A chronic challenge among smaller businesses is not setting aside enough budget to manage their online presence.

How much should small businesses be spending on their marketing?

Here’s a general rule of thumb:

  • Up to 5% to 7% of your total revenue: You are maintaining your existing sales.

  • Up to 7% to 10% of your total revenue: You are growing your business and being competitive.

  • Up to 10% to 15% of your total revenue: You are dominating, being aggressive and seeking brand saturation.

The shift to more online marketing means today’s growing businesses are implementing annual digital marketing campaigns tied to overall business goals. And they’re seeing results.

Digital marketing delivers powerful analytics data that measure campaign performance 24×7. The search engines never sleep and your campaign data are awaiting your review.

Establishing the right budget empowers your marketing team and your digital agency to create measurable success. It’s exciting to see a talented team produce amazing results in building online awareness, generating new business leads and seeing the resulting revenue growth with the right budget and tools to do so.

The Perils of Under-Investing in Digital Marketing

However, if a business under invests in marketing then they are putting themselves at a disadvantage relative to their competition. If your competitors are spending $80,000 annually and you’re spending $10,000, you are at a clear disadvantage today, and that disadvantage will grow over time.

Digital marketing delivers a better return on investment (ROI) than many forms of traditional marketing. Making online gains when you are at a budget disadvantage takes persistent discipline and creativity. Both of these are essential survival traits in todays competitive online world.

Give us a call to discuss your individual business requirements.


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