How Much Should I Spend on Marketing?

Digital marketing is on the rise and is here to stay. It has taken over old methods of marketing, such as billboards and flyers, and helped all kinds of businesses capture more customers online.  

Because of this, many small and big businesses are starting to wonder how much they need to spend to market their businesses online.

So, how much should you spend on internet marketing in Miami?

In this article, we will discuss everything you need to know about marketing budgets.  

Why is a Marketing Budget Important?

Marketing is more than just placing ads on walls or websites. It’s about knowing how and where to invest your money to catch people’s attention and gather more potential clients. As the saying goes ‘You have to spend money to earn money.’

The purpose of you marketing your company is to put your name out there and attract potential customers. For that to happen, you are going to need a marketing budget.

Your brand identity is an aspect of your business that needs to be cared for but not many people know how to do that. You will need to plan how you’re going to put your brand forward and how much will it cost to implement it. Therefore, it is important to have a marketing budget.

What Goes Into a Marketing Budget?

Marketing budgets will vary from company to company. You need fresh and innovative ideas to get the most out of a marketing budget. A lot of experimentation is also necessary to figure out what works and what does not.

Implementing a marketing budget will include costs like:

• Research - Before implementing a marketing campaign, you need to do your research. Survey different demographics to get an idea of where they want to communicate, how they want to be marketed to, and the messages that resonate with them.  
• Marketing Tools - Marketing tools may be the most visible aspect of marketing. These are the tools you need to attract more customers like physical ads or ads on websites or search engines.
• Web designers, SEO Agencies, and Freelancers - Hiring people who specialize in web design, SEO, internet marketing in Miami, and social media will be a big help if you want to expand your online presence. 
• Events - Boosting your physical presence in the marketplace is just as important as expanding your online presence. Attending expos, conferences, and other events will help you in the long run.

How Much Should You Put Into Your Digital Marketing Budget?

How much you should be spending on marketing, in general, all comes down to your numbers.  

You need to figure out what the average new client patient customer is worth to your business.  From there, you want to look and see what's your conversion rate. How many people, once they do contact you, come into your store or office and actually buy from you?  

Then, using those numbers, you can figure out what your cost per acquisition is. From there, you can also figure out how much you should be putting into your marketing to get one new client after running an average amount of dollars.  

Depending on what your business is, maybe that's $1000 a month or $10,000 a month. It depends on the kind of business you have and the potential return on investment.  

You need to analyze what your cost for new client acquisition is. It’s also important that you test a lot and monitor results to ensure that you're putting the right amount of money forward to get the right amount of money back.  

But until you dive in and test the waters, you won't have any clue what that's going to look like.  So again, there's no perfect number for how much you should be investing in your digital marketing or marketing, in general, it's all about your business and your potential for your return on investment.

Don’t be afraid to take a dive in and realize what you can earn for one possible new client, patient, or customer. And then, take a fraction of that to start using internet marketing in Miami to move your business forward.  

What is The Usual Marketing Budget?

The marketing budget over the past decade has risen to an average of 8.7% of total revenue in 2022. Trends are putting the growth at 5% since 2011.

Different industries have different marketing budgets. According to HubSpot, the technology and service consulting industries have the highest percentage of the budget to revenue at 21%. The energy industry on the hand has the least percentage of the budget to revenue at 1%.

A lot of experts agree that you should spend over 10%-50% of your marketing budget on digital marketing. These are broad figures, the next part of the article are some aspects you can look at to help you decide how much you need for your digital marketing budget.

How Do You Know Where to Allocate Budgets?

The following steps will help you properly allocate your budget to efficiently market your company online:

• Set Goals - Goal setting is the most crucial part of any internet marketing strategy in Miami. Knowing your goals will steer your marketing plan and budget in the right direction. Goals can be set by month, quarter, or year.
• Use Trackers - Tracking your expenses, web traffic, and return on investment, or ROI, helps you look at the big picture and adjust your strategy accordingly. There are several templates you can follow and know what works best for you.

• Factor in Labor Costs - A lot of people will contribute to a successful marketing campaign. Don’t forget to account for salaries to avoid overblowing your budget by the thousands.
• Pay to Grow - Many factors make up a great marketing plan. Website costs, SEO fees, and research costs are such things you have to pay to attract more customers.
• Look at Past Trends - Looking at statistics may help you understand trends that are popular in different parts of a year. Moving forward, you can look at these trends to inform your future internet marketing campaigns in Miami.  
• Come Up With a Final Budget - Now that you have looked at all of these, you can come up with a reasonable budget and have it approved. It is ideal to break down even the most minute cost for transparency.

What are the Most Common Digital Marketing Expenses?

Digital marketing is everywhere. Most websites have them and they are strategically placed to catch your attention, including on social media! Have you noticed all those sponsored content that suddenly pops out of your feed?

They’re meant to pique interest and get you to visit their page or interact with their business. Smart, right?

So what are the ways to get your target audience to take action or respond to any form of marketing? Here is some digital marketing expenses you'll need to spend money on:

• Search engine optimization
• Pay-per-click advertising
• Email marketing  

• Social media marketing
• Website design  
• Website copywriting
• Content marketing

How to Budget Digital Marketing?

Here are methods you can use to determine come up with your digital marketing budget:

• Percentage of Sales Method - This method is used mostly by small businesses. As the name suggests, the digital marketing budget is calculated by a percentage of your overall sales. 
• Objective and Task Method - Objectives or goals are one aspect of a business that all owners need to look at. Using this method means adjusting your budget to the current objective or goals of the company.
• Competitive Parity Method - This method of budgeting will try to match your digital marketing budget to others in the market. This, however, is not for all businesses. Spending varies from company to company big and small and will result in different outcomes.
• Market Share Method - Market share is defined as the portion of a market controlled by a particular company or product. By definition, this method will encourage you to spend as much or how little your share in the marketplace is.

• Unit Sales Method - This method uses the cost per item and multiplies it by the amount which the business wants to sell. This can only be done if you have the cost of advertising an item.
• Affordable Method - Affordability is always a thing to consider in any business. This method takes into account how much a business can spend. 
• All Available Funds Method - This method is the riskiest among all methods. Using all profits for advertising is aggressive. However, this is sometimes beneficial for small businesses to get the word out.

These methods are here to help you decide which to use and maximize digital marketing. You can do a hybrid of two or more if you so choose.

Lastly, once you have a goal, a digital marketing plan, and an approved budget, you will need a search engine optimization agency to help you be on top of web searches.

Make the Most Out of Your Internet Marketing Budget in Miami!

If you haven’t thought of investing in advertising your business, now is the best time to get started. Putting in money on the right internet marketing tactics in Miami will help you get the immediate results you need to start moving your business forward!

At Digital Resource, our digital marketing experts will work with you to create a custom marketing plan that will put your business ahead of your competitors and generate more sales for your business.  

Contact us today to get started!  

‍