Digital marketing has become indispensable in today’s digital era, especially in the wake of last year’s turbulent times. And while many companies recognize this fact, the question of how much should be allocated to a digital marketing budget is one that many companies grapple with. If you aren’t sure where to start, we are here to help. Here’s a guide on the cost of digital marketing in 2021.
Some questions you should ask yourself when creating a digital marketing budget:
- How much does the company generate annually?
- What are your digital marketing goals?
- Which digital marketing channels do you plan to target?
How much should you spend?
Once you understand what your digital marketing goals are, it’s time to determine how much you can actually afford to spend. It’s worth noting that a bigger budget doesn’t always win. You have to be smart about the cost of digital marketing to leverage its benefits. A good place to start is with a percentage of revenue. In 2020, companies were reported to have spent 11.2% of their revenue on digital marketing, with those making up to 10% of their revenues online allocating up to 13% of their total budget. Depending on the size of your business, a marketing investment this big can prove hefty.
As a guide, the U.S. small business administration recommends a marketing investment of about 7 to 8% of your gross revenue if you generate less than $5 million annually. This is generally enough to maintain your current position. A marketing investment of 10 to 12% can help you grow your investment. But don’t insist on spending this much if you can’t afford it.
In sum, you are going to need to spend a significant amount on your digital marketing budget. But trust us. Done right, you are going to realize a lot of gains on your marketing investment. So don’t let the cost of digital marketing stop you from growing your business.
Let us know if you would like to grow your digital marketing channels. Thanks to our dedicated team of proven digital marketing experts, we have the right skill set to help you generate leads through a killer digital marketing strategy. Simply give us at OCGnow a call today at 904-600-3600.