How much to spend on digital marketing?

How much to spend on digital marketing?

How much to spend on digital marketing?

By: Nishan Singh | 4 mins read
Published: Sep 10, 2018 10:56:02 AM | Updated: May 22, 2024 02:51:00 AM


The need for digital marketing has never been more critical than it is today. Often companies forget the importance of this. You may look at it as an additional cost or unnecessary, but we are here to tell you that in reality, it is the complete opposite of that. Digital marketing is the ultimate investment that will help your company grow and flourish if done correctly.

Think of your company as a seed; you want to turn into a plant. You water it, make sure it gets enough sunlight, but you don’t fertilize it because to you that is an additional expense you don’t think is essential for the plant. Eventually, your plant stops growing, does not reach its full potential and then withers away. All your time and effort is gone, just like that.

Now think of what would have happened if you took that extra effort, bought the right fertilizer and the plant received all the nutrients to grow and flourish consistently. All your time, energy and investment give you a beautiful, healthy plant in return.

The same way the fertilizer is the marketing aspect of your company. You hire people, create a product or service and take all the necessary steps you need to except you don’t market your product or service. Eventually, your company will fail. Without putting the right marketing efforts how are you going to gain consumer trust? How will people know about your product or service when an abundance of options surrounds us?

A study by Flurry shows that U.S. consumers spend over 5 hours a day on mobile devices, that is 5 hours a day of potential prospects you are losing out on, and 5 hours a day another company who does invest in digital marketing taking away your potential prospects. Your customers begin their buying process online Google gets over 100 billion searches a month. (Mashable, 2015) Thus you need to make sure you are showing up when and where they search if you’re not putting in those marketing efforts and are not present your potential prospects will not even know you exist, eventually you will be lost, and your company will fail.

81% of shoppers conduct online research before making big purchases. (Retailing Today, 2014) moreover, Mobile commerce makes up 30% of all U.S. e-commerce. (Internet Retailer, 2015) Digital has taken over, and it will only continue to do so. Digital marketing is the online version of your in-store salesperson. When a prospect walks into your store, a salesperson greets them, gives them information about products and services and is persuasive to make a sale. If you don’t have staff in your store to inform consumers about your products or services you are not going to have any sales.

When you hire staff for your company, you know it is beneficial and necessary. Your staff is going to give you a return on your investment, the same way marketing is the online staff that would also bring you a return on your investment, and in a result, your company will grow.

We are not telling you to invest in every single area of digital marketing, but invest in what works for you. To do this, you need to know what works best for your consumers. You should implement, test and adjust your strategies to come up with the most effective marketing plan for your company.

How much do other companies invest in digital marketing?

This report from CMO Survey conducted by Deloitte offers additional information on how you should be budgeting for your marketing efforts.


how much to spend on digital marketing A breakdown by B2B vs. B2C, as well as product vs. service.



The following tables show the average percentage of marketing budgets broken down by industry category and revenue size:





You will notice the smaller the company, the more they invest in their marketing efforts. This is because they aim to grow. However, no matter if your company is big or small you should never let your marketing efforts drop. Allowing your marketing efforts fall because you think you are at a suitable position would halt your company’s growth and may also result in its demise as there will always be another business who is doubling their marketing efforts and may replace you. Several companies large and small have come and gone from the industry because of their lack of sufficient marketing.

Every company is different, and you don’t have to follow this budget word for word. Analyze what would work best for your business, it may take some trial and error for you to come up with the perfect marketing formula that will be best for your specific company.


So how much should you be investing in marketing for your company?

You probably already have a financial plan for business however to achieve this you would need an effective marketing plan with the appropriate budget.

You should be aiming to set aside approximately 10% of your revenue for your marketing efforts. To further break this down let's say you are making $250,000 in annual revenue and you aim to double it. There is no reason you cannot achieve it if you understand your market and if it is large enough to support this goal of yours. $25,000 would be an approximate of your 10% out of the annual revenue that would go towards your marketing efforts. It may seem like a lot of money but by measuring your return on investment and making that annual revenue double up is what makes it a worthwhile investment.


What spending looks like in the social media's share of marketing


social media share of marketing budget


You can see above that the trend of social media marketing is rising fast, people are investing more, and if so many people are investing so much and so fast, that is only because they are benefiting from it. If companies were not benefiting from the investment, you would instead see a downward trend.

Don’t go in blindly, keep an eye on your investment and ROI

ROI and marketing investment


We don’t say go in blindly with your investment. It is essential to keep track of your investment along with the ROI, this way when you see the results if you ever doubted the power of digital marketing and saw it as an expenditure rather than an investment, all your doubts will be gone.