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Digital Marketing Budget 2020: How Much Should You Spend?

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Updated October 13, 2019
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Tim Brown

Tim Brown is the owner of Hook Agency, an SEO and Web Design company focused primarily on driving traffic and leads for small businesses, roofers and construction companies.

When planning your 2020 marketing budget you may be tempted to look at where other people are spending their 2020 marketing budget! You also may look at the general spend for marketers in 2018, and 2019 and where it’s headed. You also may look at where the highest R.O.I. will be and where it’s trended in the last few years.

  • According to the U.S. Small Business Administration, they’ve suggested 7% to 8% of your gross revenue should be spent on marketing.
  • The digital/online part of marketing budgets is expected to be up from 42% in 2019 – to around 45% on average by 2020
  • Video marketing is the fastest-growing category, which will be double what it was from 2016 to 2021
  • Social Media Ads will be growing (less rapidly) to hit 25% of digital marketing spending.

What are company’s top inbound marketing priorities for 2020?

Marketing Statistics + Graphs 2020, Inbound Marketing Budget Priorities

 

Where are companies spending their search ad dollars?

Search ads 2019

How should you create your digital marketing priorities in 2020?

Marketing Spend 2020 - Where to spend moreI strongly suggest taking a good hard look at every piece of closed business you had in 2019 and where it came from, and as many touch points that influenced CLOSED BUSINESS in 2019, particularly if you’re a service business – and your main objective is getting more leads.

  • Make a list of the top 10 avenues that brought in leads over the past year.
  • Identify every client you currently have and what brought them in.
  • Take the top 2-3 sources/influence points and concentrate your efforts around them and supporting them.

The way we do this is by having a list of current clients and by tracking the revenue, and each lead source – and by using Google docs to have a live list of existing business and it gives clarity in an ongoing way of where we should be spending our time and budgets.

For us, it’s fairly simple:

  • Referrals are our number one source of business, and being on boards, speaking, and putting out LinkedIn videos and social media stuff, as well as attending events and shooting videos all increase referrals. Anything that supports creating more referrals and referral systems should be doubled down on in 2020.
  • SEO is our number two with 34.2% of our business coming from organic leads, content creation, backlinking, technical SEO, and website improvements that will increase the number of conversions on our websites should be heavily prioritized.
  • Speaking and social media efforts are our 3rd and 4th priorities with a combined 5%. Clearly these two feed referrals though, so as far as they are connected – they should be solidly continued and doubled down on.

Do this for yourself – find what has the highest rate of return, find out what’s supporting that rate, and use this to prioritize. 

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5 Quick Marketing Budget Graphs and Statistics

What percentage of revenue should i spend on marketing - statistics, poll, percentage, graph 2020

  1. 48% of companies are spending between 4-10% of their revenue on marketing – Source: Hook Agency
  2. 50%+ of companies say the highest return on investment activities are search-related – including paid search, SEO and content marketing. Source: Hook Agency2020 Marketing Statistics - Return on Investment
  3. 44.4% of companies said that their top marketing objective was to increase lead generation. Source: Hook Agency Most Important Goal of Marketing to Achieve - Hook Agency
  4. 69.7% of people said they were spending less than half of their marketing budgets on digital/online marketing for 2020. Source: Hook AgencyWhat marketing spend will you put towards digital marketing in 2020?
  5. The average percentage of revenue – that companies spend on marketing is 11.2%. Source: Brafton/Gardner CMO

 

How are people in your industry prioritizing, why?

Now, what if you haven’t tried certain methods – and other people in your industry are doing them. Why do I suggest not to rush in fool-heartedly?

Just because your competitor is doing something, it doesn’t mean it’s working.

This can be colorfully illustrated if you’ve ever spent a year and 100k on something just to see that the rate of return is WAY TO LOW to continue. Just as you and your company are making a wise decision to withdraw, you see your competitor blatantly copying you.

Congratulations you played yourself Meme- DJ Khalid

 

Why should you be looking for white space instead of copying your competitors?

The most important question in marketing is “Who is it for?” – once you answer that it should make your prioritization alot easier. Define 3 ideal customers and figure out where they are REALLY spending their time online. Work with construction companies? They are probably not on LinkedIn all the time, let alone Facebook. They are at events, they are at home shows, they might be on Facebook and Instagram – a bit. High-end homeowners? They are on Facebook, Instagram, Linkedin, events, tradeshows, and talking to each other – networking.

Once you get “Who is for?” down to a T – you’ll want to find where the WHITE SPACE is within that market.
Meaning – you’ll want to figure out where your COMPETITORS AREN’T.

Where is the attention, but competitors aren’t going after it? Often it’s a place that’s hard to reach – but it’s definitely worth looking. Are the eyeballs on HGTV, but your competitors don’t want to understand TV advertising? Are they on Facebook – but your competitor doesn’t understand digital? Are they at micro-niched conventions or events?

We see this all the time in search engine optimization because Houzz is going after our construction company and home services niches, but they don’t have the manpower to market to very specific neighborhoods – so the WHITE SPACE – is in neighborhoods, cities, and super-niched content to grab these ideal customers attention with super-targeted content.

White space identification + “Who is it for?” will significantly help you prioritize your 2020 Marketing Spend.

So now that you know “who it’s for” – what marketing activities should you spend on for 2020?

The first 3 things on this list we do very little of, and I hope you understand I don’t take that very lightly. Obviously I’d love to come out here and tell you all 5 of the top things you should do for 2020 are OUR services – but I also think you should take these more seriously since we don’t do them all.

1. A beautiful brand video that tells the story of your ideal customers

The first week we put out our “brand video” we got 21 marketing qualified leads. Yes it was smack dab in the middle of the upsurge that happens with people doing marketing planning in the fall, and yes we have 4000 people on our website a day, but this is 2-3 times more than we normally get, and we put our brand-focused video ALL over our website right before this happened. Coincidence? Probably not.

  • Make sure the video makes your ideal customers look super awesome.
  • Make it about them, not you.
  • Make a 3 minute version and a 1 minute version
  • Put it all over your website in key areas where someone would be most likely to interact with it, on all of the major pages and blog pages.
  • Plan to spend money on Youtube, Facebook, and Linkedin to get the video out AT LEAST to remarket to people that were on your site in the past month.

2. Ongoing content marketing videos that let your subject matter experts entertain and educate

We get an average of 1000 views every video we put out – maybe you’d guess from YouTube? Nope.

Most of our views come from Linkedin surprisingly.

  • Find out where your ideal customers are and try to master the format there.
  • Experiment with entertaining content as well – not just educational
  • Involve your team, and let other people create videos that you believe your ideal customers would enjoy.

3. Systems around putting out video regularly, cutting it up, subtitling it, social listening and turning into blogs

The actual format of your videos matters.

  • Don’t expect people to just dive right into the first video you put out – think of every video you put out as practice and plan to practice a LONG TIME before you get ‘into the big leagues.’
  • The big-leagues would be whatever your final goal for your videos will be. For instance, 1000 Youtube subscribers, 5000 views per Linkedin video, or making your company WORLD-FAMOUS. Whatever it happens to be – practice intentionally to get there, and get 1% better every time.
  • Use subtitles under your video, and maybe a spicy title on top – square videos often get more eyeballs because they take up more screen real estate
  • Video is a powerful first piece of content, that can be then turned into podcasts, smaller videos for social, blog posts, infographics and quotes for social. Make a goal to never create a piece of content that’s only ONE piece of content – try to make every ‘pillar’ piece of content – at least a total of 3 pieces of content.

4. All kinds of targeting, experimentation and promotion effort around your best content. Upgrading your content – download, and paid ads for ‘content upgrades’

As I mentioned you should be putting budget towards distribution if you’re making great videos.

2020 will be the year of the ‘Content Upgrade’ – and there are two types:

Type 1 Content upgrade: You should always be refreshing your best content, yearly if not more often. Use shorter, easier to remember ‘permalinks’ so that you can get links back to a post, and continually make that post better. Stop abandoning your old posts and starting completely over – Google loves old, upgraded content.

Type 2 Content upgrade:
You can also find creative ways to offer ‘content upgrades’ – in the sense that you can offer a bigger better version of what they just read – in a downloadable format by providing their email address. For instance, on our site after people read ‘5 ways to change their site based on Google Analytics – you’re invited to download 10 ways in a PDF. Or after doing a basics guide for what you do – you might offer a checklist.

5. Paid search ads – paid pre-roll video on YouTube, heavy remarketing on Facebook

Certainly not revolutionary here – but paid search is still one of the top highest ‘perceived ROI’ for marketers’ marketing spends.

So certainly – look at the data, and find what’s been working for your company to create ‘marketing qualified leads,’ and double down there. The reason is crucial to not ONLY look there, is because some of this you might not have done yet – and you can’t double down on what you haven’t done before.

Video might be confusing as a point of emphasis here because #1 – we don’t currently offer it as a service – and #2 – it’s been around for businesses to participate in for 15 years, so why am I so passionate about it now?

Simply because the tools are available to do it WELL – and to actually provide a lot of value, and it’s fun. But you’d have to hang out with me sometime to really hear the nuts and bolts of why I’m so gung-ho on video, so what do you say – grab coffee sometime? 🙂


(Below is the original post from 2019)

Here are 5 Ways Marketing Spend has been moving over the past couple years

We’re closing in on the end of another year. It goes by fast, doesn’t it? Hopefully, the 2018 business year was as fruitful as you were anticipating. If not, the best place to look for a revamp to improve those numbers for 2019 is your digital marketing budget. If you’re not making enough of an impact online, you’re either not spending enough overall on your digital marketing, or you’re not spending enough where you need to.

How much should you spend on marketing in 2019?

What About Traditional Marketing?

Traditional marketing is still prevalent… but not nearly as much as prevalent as it was 50 years ago. Traditional marketing is dying and the future belongs to digital. Traditional marketing doesn’t allow for interactions with your brand, is costly, and is near impossible to measure ROI on your campaigns. That’s not to say that you should completely avoid traditional marketing moves, because there are still some effective ways to reach your target audience with an effective message. For example, attending trade shows is a great way to personally connect with your target market.

And that’s what marketing is all about: making connections.

And that’s what digital marketing excels at. Personalized interactions, information, and content that your consumers want to see.

So, How Much Should You Be Spending on Your 2019 Digital Marketing Budget?

Most Important Objectives

According to the U.S. Small Business Administration, they’ve suggested 7% to 8% of your gross revenue should be spent on marketing.

50% of that marketing budget should be dedicated to digital marketing in 2019. Seem a little high? Well in 2020, it should be 55%. The average company is spending 35% of their marketing budget on digital campaigns, and that’s not enough. The average company is stuck three years in the past.

Be bold, be ahead of the curve, and shoot for half of your marketing budget to put towards digital.

For a sense of scale, let’s look at a business that makes $2 million in revenue. If 7% of their budget is allocated to marketing, they have $140,000 to work with. Half of that is $70,000, which gives them their digital marketing budget.

Forward-thinking companies or companies that lean heavier on digital marketing might also spend the majority of their marketing budget on digital.

Youtube Ads

Youtube ads have become hallowed ground in the digital marketing realm. By identifying channels that your target market watches, you can create a highly personalized experience. Sure, these ads are oftentimes intrusive, but if you do the work to grab the attention of your audience with relevant information or humor in the hook (first 5-10 seconds before they can skip the ad), you can gain an attentive audience.

I recently came across this ad before a Youtube video, and while it was skippable after 10 seconds, I was hooked within the first 5. Everything about this advertisement is great. It doesn’t feel like an ad; it feels like an actual video you would watch on Youtube. Naadam does an excellent job at conveying who they are, what they care about, and why I should care in 2 and a half minute ad. The ad alone has 1 million views on Youtube, combined with what they pay for to get it placed in front of other videos. These ads don’t have to be intrusive. They can be creative and entertaining.

Will I purchase from these guys? Well, I’m not really in need of a wool sweater, but if I ever am, I will definitely be checking out Naadam.

If you do Youtube ads well, then you should see a positive ROI. Spending anywhere from $3,000-$5,000 makes sense for a small business to spend on Youtube ads and you can always adjust based on the results.

I’m looking forward to seeing more companies work harder to create honest and engaging ads on Youtube. Now if only they did the same on Hulu

SEO

Search Engine Optimization should never be neglected, especially as a small business that has a lot of competition vying for the top spots on Google. If you want to get serious results, spend anywhere from $2,000 – $5,000. If you want to grow your own knowledge of SEO, then do the due diligence and find a partner who can help you dominate the search landscape. The benefit of hiring an agency is that they are constantly learning and growing with the types of clients and the kinds of experiments they get to do with it as a full-time pursuit.

If you can find someone who’s serious about SEO and passionate about driving quantifiable results – and your company can afford to hire them, do it now.

Facebook Ads

Sometimes, it feels like Facebook is less of social media platform and more like a digital advertising avenue.

Quite frankly, that’s okay.

Facebook’s advertising platform is like none other in terms of personalization.

Say what you want about Facebook and their data management and subsequent scandals, but odds are if you see an ad on Facebook, it’s going to be a product or service that you’re interested in.

In terms of how much to spend on Facebook ads, some sources will tell you to spend $1 for every 100 website visitors you receive. Anywhere from $5,000 – $10,000 is a good benchmark as well.

fjallraven facebook ad
As someone who has been looking to purchase new hiking pants, ads like these are highly relevant for me and based off of my past searches.

Paid Search

When it comes to PPC ads, there isn’t necessarily a specific amount you should set aside for paid search. Instead, you should test, test, test.

Test different ad copy and see which ads generate the most leads, then put your resources behind the those ads.

Whether you should spend 50% of your digital marketing budget on paid ads, or 10% depends on where you’re sitting for your SEO keywords that you really want to go after. If you’re already sitting high up in the Google search results, then it makes more sense to get in front of more people with 70k yearly in Facebook ads instead, using videos and nicely curated photos that pushed the current promotion or the exciting aspects of their business, so that people were more likely to interact.

Instagram Influencers

When people think of influencers on social media, they think big names like, like a Kendall Jenner or Casey Neistat. But you don’t have to pair up with someone who has millions of followers to make an impact with influencer marketing. Teaming up with a local or micro influencer (those with 10,000 followers or less) is a great way to expand your brand awareness to the their followers.

Casey Neistat red nose day
Casey Neistat was one of many celebs that worked with Red Nose Day, a non-for-profit working towards ending child poverty.

Spending anywhere from $1,000 – $8,000 is smart for a smaller business when it comes to Instagram Influencers. What it will really depend on is what your product offering is and whether or not Instagram is a good platform to market towards.

For example, if you’re a clothing company, you should put more money towards creating nice-looking photos with people wearing your clothes then compared to an I.T. services company.

That’s not to say you should totally rule on using influencer marketing, but you should spend more time and resources in other areas, such as PPC and Email.

Content Marketing Remains Important

For most brands, this is about creating guides, resources, and tools – as well as answering the most often asked questions people have about their company in a detailed and visually compelling way. Your goal should be to create connections and relationships with your customers through your content.

If you have the best answers – the easiest to understand solutions, you can earn more attention and build those relationships.

As opposed to the interruption style of advertising that has previously dominated, permission marketing – in the form of content strategy (often on company blogs and guides) is becoming bigger and bigger.

Don’t Be Afraid to Outsource

If you’re relatively new to digital marketing strategies or just can’t seem to get anything going with your current campaigns, then it’s time to seek some assistance from a digital marketing agency.

If you’d like to chat about budgeting for 2019, reach out today to set up a meeting!

5 Crazy Ways to Spend Your Marketing Budget (2019 Edition)

Do you want to spend money on marketing – but only want it to be on the things that will provide an actual return on investment? A good average for marketing return is 1:5 – meaning if you do it well, spending 1 dollar on marketing should lead to $5 in revenue!

Here are 5 ways to make 1 dollar turn into 5 (or 10k turn into 50k.) 

1. Event Marketing + Influencers

Host an event, but ensure you have it stacked with 2-3 or more people in the niche of your ideal customer that can draw a crowd. How big that crowd needs to be can help you figure out if you need to pay these influencers, just have them speak, or something more dramatic or involved.

Events are massive, because face to face interaction is massive. We’re so much more likely to do business with people we like, know, and trust – and events can help us establish all three. 
 Giphy Money

2. Paid Search – Expanded Exact Match Keywords

Paying Google for your search terms is so 2000-and-late… or is it? If you don’t keep a tight rein on your keywords, Google will spend up your budget before you get any ROI. However, if you use “expanded exact match” or this format – Keyword+Other+Terms, all of the keywords have to be present, and it keeps the searches you’re showing up for focused. Paying for your top 20-50 keywords / phrases in Google is still relevant now – and powerful (in the right niche.)
 

3. Search Engine Optimization + Heavy Duty Content Pieces

If your site is not set up well to be easily crawled by search engines – it’s extremely important that you get it fixed as soon as possible.

SEO is no longer a “nice to have,” it’s baseline marketing – because people are using search engines constantly, it’s important to consistently be improving your website, getting links back to your website, and regularly build out content intentionally for people searching on Google – just to PARTICIPATE in the internet today.

Not to mention it has one of the highest perception for return on investment in a recent poll of marketing leaders. Push for bigger, deeper, and more intentional content targeting + build out serious resources that will attract people from search engines.

4. Paid Social

THE ATTENTION  is on social – Instagram, Facebook, LinkedIn and Twitter are 2-3 hour a day habits for people under 35. Are you meeting them where they are?

Are you doing everything in your power and monetary limits to stay top of mind? From promoting posts with your best content – to re-marketing on Facebook and instagram for brand awareness (ideally with video), or just doing A/B tests with your best offers.

Hint: The CREATIVE  is the absolute most important part – how are you SNATCHING their attention with spot-on headlines and images, and what are you doing to attract the next step. For services based business – I strongly suggest pushing for real consultations, rather than just downloads when possible – as it’s easy to waste a lot of money on leads that don’t close if you just offer a download.
 

5. Re-marketing + ‘Geo-targeted’ Display Ads

When someone tells me they aren’t re-marketing (also known as retargeting) – I’m always scared they are leaving money on the table.

Re-marketing is when you visit a site and then that company’s ads follow you around for the next week, and clicks for that advertiser are so much cheaper than normal ad clicks because you’re much more likely to click on something you’ve already expressed interest in. Google’s Ad network + Facebook are great places to do re-marketing, and it’s also easier than ever to target specific geographic areas on these platforms than ever.

Have a higher concentration of ideal customers on Lake Minnetonka? Enter the cities surrounding it in your Google ad targeting, and serve a compelling ‘free consultation’ image ad to them. Wherever your ideal customers are – target their location (and types of websites they are visiting!) Ads are getting more powerful – more granular than ever, and if you aren’t taking advantage of some of these targeting options that are available to everybody – you’re missing the window when it’s such a great deal.
 


Want a non-judgemental, honest assessment of where you should spend your 2018 digital marketing budget? Send us a message now, and we can talk through what’s most important for marketing YOUR BUSINESS – even if it’s not appropriate to hire us!


How do you determine what the R.O.I of your marketing activities are?

You need ‘attribution.’

Figure out how to track everything – figure out where leads are coming from and make sure it’s all tracked. If you have analytics conversions in place, that’s a great step, but you need to find how many event leads you’re getting – and ideally what percentage of your leads are closing!

I’ve seen companies drop 10-15K on paid ads, and get 100 leads thinking they were winning. 

Only to go back through all the leads, and not one of them had closed. 

At that point, you need to determine the closing ratio for each one of your marketing activities are:

  • Determine the average ‘customer lifetime value’ or CLV.
  • Determine the percentage of leads that turn into sales for each channel of marketing.
  • Find out how much you spent on each avenue of marketing for this past year.
  • Now calculate the return on investment – feel free to use our SEO ROI Calculator, for projecting SEO ROI.

SEO ROI Calculator - Search Engine Optimization Return on Investment

 

What will determine whether these marketing activities will be wildly successful?

You need to find which activities and what efforts are giving a significant ROI.

Then – you need to put habits or a systematic approach into these efforts.

I’m absolutely convinced that without a systematic approach (and ‘bumpers’ or – calendar reminders, other systems for accountability) that it’s very hard to keep your highest ROI marketing activities consistently churning out solid numbers of leads and new business.

If this next year is all about experimentation – then so be it, but the ultimate goal is to get to 3-5 key ‘heavy-duty’ marketing activities that you know you can push into at any time and get a good result from – here are 3 of mine:

  • Writing useful and keyword targeted blog posts for our ideal customers.
  • Taking a referral partner, somebody in a company like ours, or ideal customer to lunch (or going to an event) and giving value.
  • Creating a specific, targeted ad that corresponds with a useful resource or landing page on our site.

If you already know what your ‘high return’ habits are – it’s time to double down on those that are working – and try to shed the busy-work that’s not creating a return. If it’s not producing leads – stop mechanically spending time there.

If you haven’t yet – definitely check out our recent post: “How to Get Results Fast as a Crazy Awesome Marketing Director” for more!

 

5 crazy effective ways to spend your 2019 marketing (time &) budget: Monday Morning Marketing + Coffee

5 crazy effective ways to spend your 2019 marketing (time &) budget: Monday Morning Marketing + Coffee

Posted by Tim Brown on Monday, October 15, 2018

 

 

Here is the original post:


Many companies are planning their marketing budgets for 2018 – and may be looking for industry averages for marketing spending so that they can inform their next steps.

How much should my company spend on marketing?

According to the U.S. Small Business Administration, they’ve suggested 7% to 8% of your gross revenue should be spent on marketing – this being the standard for companies making less than $5 Million a year in sales, and if your net profit margin (considering expenses) is around 10 to 12 percent.

Perceived R.O.I. per different marketing channels. How much should we spend on marketing this year?

For companies doing less than $25 Million, the average was 11% according to the American Marketing Association and Duke University – companies with $25 million to $99 million were spending 9% on marketing.

In short, the answer might be anywhere from 7% to 11% of your revenue and skewing on the lower side if you’re a smaller business

How much of your marketing budget should go-to digital marketing?

In 2017, companies put 30% of their marketing spending to digital marketing. This number is expected to increase in 2018 to 35%.

To give a little sense of scale – let’s consider a company with $3 million in revenue.

At 7% you may spend $140,000 total on marketing – 35% of that would be for digital marketing.

How should I spend digital marketing money 201z?

Where should you spend your digital marketing budget?

In the case of our hypothetical company above first they need to understand ‘what marketing is, and general principles for doing it well’ (to do this – perhaps check out this Marketing Plan template from G2Crowd). The next step is that they could hire a low-level digital marketing person who doesn’t have any real expertise, or they could have a digital marketing agency do a couple of things:

  • Create a compelling and effective website that can convert customers – average budget: 15k for a company this size.
  • Roll out an aggressive SEO strategy built to drive targeted traffic with content and earning links from high authority sites – 36k (or 3k a month.)
  • If you incentivize an employee with other duties to do social media marketing in-house, you can create some efficiency there.
  • You could allocate some of this budget to paid ads as necessary – depending on your industry.

Migration from traditional to digital marketing

Forward-thinking companies or companies that lean heavier on digital marketing might also spend the majority of their marketing/advertising budget on digital.

It’s all up to you – many companies will customize these general principals to their specific needs, and the realities of their market. So if your company has seen serious results from leads or sales from digital marketing in the past – that might be the only thing you spend on, though usually there’s at least some spending on non-digital marketing efforts.

Future Trends that Digital marketers are anticipating

Where will marketing efforts trend in the future?

To be sure – as the concentration of people’s attention starts migrating even further from traditional media, companies will evolve to marketing better via alternative video platforms, rather than traditional TV commercials – and will likely involve what is called ‘permission marketing.’

Permission marketing – is the alternative to ‘interruptive marketing,’ in that permission marketing (as coined by Seth Godin) is all about creating content that people invite into their lives – even though you’re using the content as a trojan horse for your brand message.

Content marketing is growing in importance.

For most brands, this is about creating guides, resources, and tools – as well as answering the most often asked questions people have about their company in a detailed and visually compelling way.

If you have the best answers – the easiest to understand solutions, you can earn more attention.

As opposed to the interruption style of advertising that has previously dominated, permission marketing – in the form of content strategy (often on company blogs and guides) is becoming bigger and bigger.

What does all this mean for you?

Whatever your budget – focus on marketing that is native, meaning it doesn’t interrupt people’s lives – and is genuinely useful.

This doesn’t mean you can’t promote your content, or put serious ad budget towards your content – but making that content intentional about adding value first and foremost. Whether this is with your TV commercials, printed materials, or with Content marketing and SEO, this should be the guiding principle.

What should you spend on a website?

Of course, if you’re just starting your business – you should probably choose a do-it-yourself builder like Squarespace or a pre-packaged WordPress theme.

If you’ve been in business longer and have over 100-200k in revenues, it’s probably time to find an inexpensive, but professional provider. Perhaps 5-10k.

If you make over 500k, you will want to spend at least 10k on a website, but it doesn’t need to be a lot more than that if you make 2-10 million. (10-20k).

Once you start getting into the 10 million and up the range, you should really consider your website as a serious investment that you should not only spend at least 20k on but something where you have internal people focused on the ongoing success of that website as well.

Creating an effective website is really a matter of making ongoing changes to a solid initial structure and design.

What should you spend on PPC?

Before you spend 10k a month on PPC – consider trying to spend a few thousand dollars in tests and moving the money back and forth between tactics to try to find something that produces results.

It’s like a metal detector – you wouldn’t start digging in if it’s not beeping. If your test of ads starts converting real leads and sales, the degree and frequency to which the test is beeping is your indication of whether you should dig in or not.

When it comes to using PPC to generate leads – it’s crucial there is a strong component of lead qualification in your team when you’re doing tests. Make sure there’s the communication of what percentage of the leads are closing, otherwise in the metal detector analogy all you’ve got is an old rusty wagon.

Whether you should spend 50% of your digital marketing budget on paid ads, or 10% depends on your business model and tests you implement in step one.

SEO is pure magic for some industries and a waste of time for others. For instance, I had a client who didn’t have very many competitors – and was already dominating on his local market for the terms he wanted to go after (1st or 2nd for every term.)

In this case, it made more sense to get in front of more people with 70k yearly in Facebook ads instead, using videos and nicely curated photos that pushed the current promotion or the exciting aspects of their business, so that people were more likely to interact.

What should you spend on e-mail marketing?

E-mail marketing is highly effective when done properly, and a total flop when squandered.

E-mails are getting opened less these days, and not everyone has done the intensive legwork to curate a list.

“Production of an individual email can cost anywhere from $300 to $10k or more depending on email complexity, dynamic elements, number of content areas, number of links, originality of artwork, templates, segmentation, testing, and so on,” according to Trendline Interactive. Trendline charges 10-100k for projects, and 20k per month and up for recurring monthly retainers.

What should you spend on social media marketing?

Social media marketing is awesome, but many companies should do this in-house – perhaps with an administrative assistant, themselves if they are a sole proprietor – or a recent college grad with a passion for marketing.

The key is to stay regular and consistent and learn some of the things that work best at getting attention to videos of a process, photos of culture, and guides and resources created to drive traffic. So if you’re a medium-sized company perhaps 35k for a recent college grad, or if you’re a smaller company – 10k as part of an admin’s salary allocated for that purpose.

What should you spend on SEO?

For many B2B businesses, they’d rather BUILD something of substance that can serve them for the foreseeable future – in the form of their website, and the organic reach of that website with SEO.

I think companies that spend heavily on this see a substantial return and depending on their industry; this can be the primary digital marketing effort. Spend anywhere from $1,500 – $5000 to get serious results, and learn about SEO yourself, to make sure you’re working with the right partner.

Real SEO specialists are few and far between – so don’t think you can just hire this internally and see the same type of return. The benefit of hiring an agency is that they are consistently learning and growing with the types of clients and the kinds of experiments they get to do with it as a full-time pursuit.

If you can find someone who’s serious about SEO and passionate about driving quantifiable results – and your company can afford to hire them, do it now.

Finishing up – a few notes on this 2020 Digital Marketing Budget Guide

It’s difficult to suggest a clear guide for digital marketing budgeting, without knowing the specifics of your situation.

Of course, utilize the realities of your business to get a clear picture of what you should spend on digital marketing in 2019.


Commonly Asked Questions About Digital Marketing Budgets:

How much do companies spend on digital marketing?

It’s becoming more and more common for companies to spend 50% or above 50% of their total marketing budget on digital marketing in particular. Total marketing budgets usually fall within 5 to 15% of total revenue according to several industry-specific surveys (lower for the high cost of goods companies like construction or manufacturing, and higher for services and tech.) So a quick snapshot of a company making 3 million dollars and spending the average – they might spend 300k on marketing – half of that could be print, events, vehicle wraps, and trade shows and the other half could be search engine optimization, Google paid ads, social media, and e-mail automation.

How do you allocate a budget for digital marketing?

Start with the things that have paid your company back significantly in the past by looking at where your current best customers come from. Then double down on the approaches that work. If you’re somewhat new to marketing, look at competitors – but mostly look where the ATTENTION of ideal customers is. Find the events, websites, and social sites where they spend their time – and push your efforts into that first.

What does digital marketing include?

Search Engine Optimization, Paid Search Ads on Google, Ad networks on other sites, Facebook ads and social media marketing in general, e-mail newsletters and automation, content marketing + video marketing, as well as any website partnerships you could all fall into digital marketing. Other avenues within digital marketing may be lesser-known – but the key is finding where the attention is, and where people are actually searching for what you offer and making your company as visible as possible there. This is why so many small businesses work with a digital marketing agency like us, Hook Agency, to increase their professional visibility online. Send us a message now for a free consultation.

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Tim Brown

Tim Brown is the owner of Hook Agency, an SEO and Web Design company focused primarily on driving traffic and leads for small businesses, roofers and construction companies.

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2 Comments on "Digital Marketing Budget 2020: How Much Should You Spend?"

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Anna Persson
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There is so much good information here to pass along and educate business owners in where to best spend their marketing dollars. I think it’s very helpful when a person can better track results and know where and how to increase influence and bring in a higher roi. Thanks for sharing. Super helpful.

Millie Hue
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I like that you pointed out that choosing an agency will ensure that you will get people who are continuously learning regarding ways of marketing their clients. I will share this tip with my sister since she might need their services someday once she gets approved by a lender. It appears that she is already getting money for the capital of her dream restaurant, and this will help her promote her future business.

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