Marketing is a tricky thing to assess in this day and age. At one point, there were only a few channels for businesses to market themselves on. Now, however, you’re faced with the vast ocean of the internet to try and find your place within.
The first question to deal with is where in the world you’ll put your marketing budget. The second question is how much money you plan to spend on marketing.
We’re going to look at an “average marketing budget” today, giving you some insight into what you should expect to pay for your business marketing efforts.
What Is an Average Marketing Budget?
The idea of using an average marketing budget for your business is a little off of the mark. Each industry, business style, and particular niche have different rates at which they spend their typical marketing budgets.
Further, the circumstances of your business are unique. You might have different advantages or disadvantages that other businesses don’t have, and those factors influence your marketing needs as well.
Generally speaking, a company should spend anywhere from two to ten percent of its revenue on marketing. Spread that average across all of the businesses in the world, though, and you might find two percent of one business’ budget is a billion dollars, whereas ten percent of another’s is 500 dollars.
It’s all relative. With that in mind, what factors should you take into consideration?
Business-to-Business Marketing
B2B businesses might have a smaller marketing need than others. You’re marketing to other businesses, so there’s not as wide of an audience to market to.
That helps you a lot, considering that you don’t need to be present on all of the social media platforms and search engine searches. That said, you want to hone in on your niche and market to them well.
Depending on your particular corner of the industry, there might be a lot of potential businesses that you’re looking to work with. The wider the scope of potential clients, the more potential there is for you to succeed. That also means your marketing budget might have to increase to be comprehensive.
On average, business-to-business companies might spend around 10 percent of their revenue on marketing. That’s money that comes straight from clients and funnels back into your business in the form of marketing.
Depending on the industry you’re in, though, those dollars could go in several different directions. We’re going to take a look at where to put your marketing dollars a little later on in the article.
Business-to-Customer Marketing
B2C businesses tend to invest a little more in marketing than their B2B counterparts. This is because there’s a much wider pool of individuals in their target audience than in the case of B2B businesses.
Again, though, it all depends on the corner of the market that you’re in. Some niches are very refined and their audiences live in a particular place. For example, say that your business sells vintage pinball machines.
In terms of community, you might have a lot of people across the nation that have an interest in buying machines. That said, it’s a very specialized interest, so individuals in your market likely engage online in very particular places.
You can market to those spaces alone and be confident that you’re not missing out elsewhere. That saves you money and reduces the amount of effort that goes into market research.
On the other hand, businesses that sell clothing or general use items have a much larger task on their hands. If you want to sell a toothbrush, who do you market to? Everyone?
There’s a lot of market research that goes into discerning which groups are most interested in your particular brand of toothbrush. Then, you have to find where they spend their time online.
Odds are that there is a wide scope of essential platforms to market to. Plus, you’re competing with big companies for those users. All of those things require boosts in the marketing budget.
Your Initial Approach
Start marketing with a particular figure in mind. Eight percent of your revenue is a good place to start.
That’s a value that’s enough to make a significant difference, but it isn’t going to occupy the bulk of your budget. Once you start figuring out your niche and focusing on what works, you’ll see whether or not you need to use that amount.
You might find that your efforts aren’t working well and you need to divest more money into your marketing campaign. The only way to strike a balance is through trial and error. That’s a scary proposition, but businesses are so unique to themselves that it’s hard to say precisely how much money should go toward marketing.
Where to Put Your Marketing Budget
So, where should you put that eight percent of your revenue?
This, again, is very subjective. Some businesses might benefit a great deal from taking an ad out in the newspaper, while that would be the absolute worst idea for most other businesses.
The same goes for highway billboards, television commercials, and direct mail. All of those things have some value to particular niches of the industry. Companies that offer personal services benefit a lot from handwritten notes and cards.
It might not be worth it for a clothing seller to make the same gesture, though. One thing that ties nearly every single business together, though, is the need for digital marketing.
Why is Digital Marketing So Important?
The fact is that most customers start the buyer’s journey online. When you’re heading out to go shopping for something in particular, you make a quick Google search and see what’s in your area.
Maybe you even research the products you want to buy before you set foot out the door. In that case, the customer is shopping online, but picking it up in-store because it’s more convenient. All of the important marketing and sales factors, though, occurred online before the person ever entered the actual store.
The name of the game is getting to the customer before the competition does. That happens in a number of ways that come along with respective digital marketing tactics.
Let’s take a look at those avenues.
Search Engine Rankings
The first place to outstretch your competition is in search engine rankings. Search engine optimization (SEO) is the process of tailoring your website to meet the preferences of the search engine algorithm. In most cases, that search engine is Google.
Landing at the top of the Search Engine Results Pages (SERPS) is massive for any business. Users tend to click one of the first three or four pages in the search results, and businesses that fall lower on that list lose a lot of potential business.
Once you’re near the top, you also get access to certain things like the Google Snack Pack, which offers images and descriptions of business hours, pricing, reviews, and more. It’s like your business is up on a hot, delicious platter, ripe for the clicking.
Getting to that point, though, requires a significant amount of effort. Content creation, back-end editing, technical SEO, hosting adjustments, and more all come into play. Unless you want to dedicate a chunk of your time to learning and executing that, that means paying professionals to do so.
Pay-Per-Click Marketing
Pay-per-click (PPC) marketing is the act of producing those tempting little ads that pop up in your social media and search engine feeds.
These ads only charge you when they’re clicked by users. There’s a fee per click that depends on the popularity of the keyword used. To be effective, a business has to identify popular keywords in their niche that would draw relevant users to their site.
The difficult thing is, you need to select the most expensive keywords to reach the highest number of users. This could be a significant chunk of your marketing budget if you’re interested in seeing early success. The popular keywords in relevant social media platforms are there for the taking if you want to pay for them.
The beauty of PPC is that you access those keywords right away. There’s no delay in the process and you’re in front of interested users in a matter of moments.
On the other hand, search engine optimization allows you to hold constant ground in popular searches without paying a premium for that privilege. The investment comes on the front end when you’re working on your SEO campaign.
Once you’re at the top of the results, though, it doesn’t cost anything and you might stay there for a long time. In either case, you need professionals on your team. Take a look at professional digital marketing here.
Want to Learn More About Budgeting for Marketing?
Finding the average marketing budget for most businesses might not be relevant to you. It’s a good place to start with your marketing costs, though. The best move is to adjust your percentages after you’ve dipped your toes into the target audience.
We’re here to help you with more ideas if you need them. Explore our site for insight into digital marketing, search engine optimization, business strategies, and more Learn More
