Whenever we consult for a group, however small or big they are, this is always the inevitable question “How much must we spend on our digital marketing strategy?” Not every business has an unlimited marketing budget. You can optimize even a limited budget by choosing to invest in online strategies with a potentially higher return.
What is an ideal marketing budget and where to spend it
The general rule of thumb is to spend 7-10% of your gross revenue on marketing. Again, if you are a new business, this budget should be 12-20% of your revenue since you are still establishing your brand and need to reach customers. Established companies with good brand equity can spend 6 -12% on marketing.
While the above is an overall average, the market budget as a percent of gross revenue can vary from industry to industry. B2C sectors usually spend more, with an average of 13.7%. The B2B sector usually has average spending of 6%.
B2C sectors usually spend more, with an average of 13.7%. The B2B sector usually has average spending of 6%.
Of the total marketing budget, half should be spent on an online marketing strategy. However, many companies fall far short of this. The growing popularity of the internet means that most of your customers can be reached here. This makes it crucial that you allocate a fair bit of your budget to digital campaigns.