How to Budget for Digital Marketing Projects
Every company has unique digital marking projects. Budgeting and planning for online advertising costs will depend on your industry, company size, and overarching business goals. While company goals may differ, Centro can offer you a tested framework to create the optimum marketing budget for your business. Develop your plan, and consider your priorities, marketing channels—and even the average advertising cost of your competitors.
What Is an Average Advertising Cost for a Digital Campaign?
A typical mid-sized business puts about 35 percent of their overall marketing budget towards online advertising costs—some industries allocate quite a bit more. Below are some estimates for the average budgeting percentages allocated to digital marketing in industries that tend to rely on online ads the most:
- Marketing agencies—more than 60 percent
- Transportation—about 55 percent
- Information technology—about 50 percent
Spending also varies by advertising type. Email, display ads, search and social media advertising costs have increased exponentially over the last few years. These figures show that costs vary by project, company, and industry.
Developing Your Budget to Cover Online Advertising Costs
You don’t necessarily need to utilize every available marketing channel to enjoy success. In fact, marketers with smaller budgets should focus on developing a good plan with one or very few marketing channels, to ensure optimization and allow them to receive maximum value. Avoid stretching your dollars or attention too thin.
With that in mind, take these steps to right-size your company’s online advertising cost:
Of course, your digital marketing goals should support your overarching marketing goals. For instance, a B2B company may hope to improve sales and brand awareness. After you know what results you desire, you can set measures that will demonstrate how well you’re doing.
- If you want to increase sales—measure conversions, shopping cart size, and retention.
- If you want to make more people aware of your company or a new product—measure social media followers, subscriptions, or website views.
Consider Your Historical Average Advertising Cost
Your past performance can indicate how you should act in the future. Notice where your dollars have translated into sales in the past, and of course, which marketing investments did not help your company grow at all. At this point, you may want to allocate money based on past performance or determine why certain channels did not produce any positive returns.
Research Your Market
Research anticipated costs for various types of online ads before you calculate how much money you will need to support your goals. Use tools and observation to explore marketing channels your competitors use to estimate the amount they spend. In addition, keyword research should uncover the search terms you plan to target and the average costs for ranking well on these terms.
Spend What You Can
If your initial plan requires an unrealistic budget for your company, you may need to develop another plan. Try reducing the number of channels or find cheaper related or long-tail keywords with which to start. If your initial efforts help support your goals, you may be able to utilize a larger budget later to expand your efforts. Average B2B companies spend about 5 percent of their overall revenues to promote products—however, B2C companies tend to spend about twice that amount.
Enjoy the Best Returns from your Online Advertising Costs
Finally, use the previously set measures, or metrics, to assess how well each piece of your marketing plan is performing. If certain channels or campaigns within those channels don’t produce, revisit them to figure out if they need tweaking or even discarding.
Take the best course by developing a plan with metrics to track your progress and avoid the pitfalls of trying to market in the dark.