Businesses, big and small, struggle to create a definite number for their digital marketing budget. Unfortunately, getting it wrong can prove harmful for the business as a whole.
Don’t invest enough, and you’ll suffer from not enough exposure.
Put too much money toward digital marketing, and other business areas may suffer.
So, what is a realistic digital marketing budget?
Of course, no single number fits all. Bigger businesses will spend more on it than smaller ones. There are rules you can abide by that will likely garner the most success, though.
What’s Included in Your Digital Marketing Budget?
Before deciding on a price, you must understand what is included in your digital marketing budget. For most businesses, that will include:
How you allocate your budget depends on your business’s goals and priorities. If you are a bigger business, you might put more money toward PR, for example.
It’s crucial to understand your customers and appeal to them directly. Knowing your customers through and through lets you make better decisions with your digital marketing strategies.
How to Create a Digital Marketing Budget
So, what goes into digital marketing budgets in 2023?
A good rule to stick to when creating a digital marketing budget is to allocate 6-10% of your revenue. That is what most businesses do – big and small – and is generally considered the ‘correct’ amount to invest in digital marketing.
For some companies, that might mean a couple of thousand pounds, and for others, it might mean hundreds of thousands of pounds.
How to Allocate Your Budget
Once you have an overall number, you might wonder how to spend it. The 70-20-10 rule is a good one to stick to. The 70-20-10 rule means putting 70% of the budget on the ‘now’, 20% on the ‘next’, and 10% on the ‘new’.
Here is what that means.
When using the 70-20-10 rule, 70% of your budget goes on the now, which means stuff you already know works well. For example, you might currently pay a content writer to write blogs for your website. Over the years, they have brought organic traffic to your website, so you trust the strategy. So that would be included in the 70%.
20% of your budget would go towards new digital marketing strategies. Marketing evolves, so you should put money into different things.
Lastly, 10% of your digital marketing budget would go toward new, experimental digital marketing techniques. That is for up-and-coming methods – those that you can’t fully trust yet. If they don’t work, you only spend 10%, but if they do, they could bring a lot of customers to your door. Plus, you’d be ahead of the game.
Budgeting Correctly is Crucial
Creating and sticking to a sensible budget is essential for whichever digital marketing strategies you decide to invest in.
By allocating 6-10% of your revenue, using the 70-20-10 rule, and focusing on your customers, you can create a digital marketing budget that puts a spotlight on your brand without running your business’s finances dry.