The goal of digital marketing is simple — grow your business through online marketing and advertising strategies. These strategies revolve around digital technologies, from search engine optimization to social media marketing and more.
The golden tactic to gain customers is to know your audience. Combined, demographic and psychographic information can help you fine-tune your audience targeting goals.
How much should a company spend on digital marketing?
| BUSINESS SIZE | PERCENT OF REVENUE TO SPEND ON MARKETING |
|---|---|
| Small business | 7-8% |
| Mid-sized business | 10% |
| Enterprise business | 15% |
No matter the size of your business, it’s important to research how much you should spend on digital marketing. Digital marketing agency pricing varies, but plenty of agencies claim that they offer extremely cheap rates — and that is what your company needs to look out for looking to hire a marketing firm.
In almost all cases, you get what you pay for in terms of digital marketing services. So “cheap” services often don’t drive the results you want.
That is why it’s critical to set a reasonable digital marketing budget. If you try to make your price range as low as possible, you’ll get what you pay for, unfortunately.
What is a reasonable budget, though?
How much should a company spend on digital marketing?
While several factors influence digital marketing budgets, like the size of your company and the scope of your project, the average digital marketing budget ranges from $30,000 to $145,000 per year for SMBs. Keep in mind that digital marketing is an ongoing strategy, so your budget may change as you grow.
For more guidance, check out this table, which shares the percentage of revenue different industries invest into marketing:
How much should a company spend on digital marketing?
Note: These price points are adjusted for the US & EU markets.
Entry Tier Local Services Package
● Google My Business Claiming Service – $80 to $140 (one time fee)
● Google My Business Optimization Service – $199 to $399 (a month)
● Google Analytics Pixel Installation Service – $149 to $299 (one time fee)
● Google Adwords Pixel Installation Service – $199 to $299 (one time fee)
● Facebook Ads Pixel Installation Service – $99 to $199 (one time fee)
● Facebook Page Optimization Service – $299 to $499 (one time fee)
Medium Tier Local Services Package (every Month)
● Google My Business Optimization & Local SEO – $299 to $799
● Google My Business Management Service – $299 to $799
● Facebook Page Management – $299 to $799
● Website OnPage SEO Optimization – $399 to $1499
● Video Marketing & Content Creation – $1799 to $2999
Advanced Tier Local Services Package (a month)
● Facebook Ads Marketing Service – $997 to $2999
● Google Adwords Marketing Service – $797 to $1999
● SEO & Local Google Ranking – $1497 to $2597
● Online Store Management Service – $2497 to $2999
Advanced Tier Web Development Services Package
● Website development Service – $1500 to $10000 (one time fee)
● Hosting Service – $15 a month
Factor in salaries, agency costs, and production costs
Marketing budgets need to account for every aspect necessary to produce results, including:
- Software fees
- Salaries
- Market research costs
- Website costs
- Agency or freelancing fees
- Payroll
For example, hiring a Video Marketing Coordinator may seem more cost-effective than constantly outsourcing video production needs. However, it may be more costly to the business after factoring in the associated equipment, software, HR fees, and travel expenses. Failing to incorporate all costs into your digital marketing budget can leave you and your team in an undesirable position — potentially going thousands of dollars over budget.