No matter the industry, successful businesses tend to have one thing in common: they implement strategic marketing plans to increase awareness, drive sales, and help their business grow.
If you are a business owner, or are thinking about becoming one, you probably already know how important it is for your business be visible online. You may also be curious about online marketing, or ‘digital marketing.’ What is it? … How much will it cost me? … Is it worth it?
Here are some recent statistics pertaining to digital marketing spend from web strategies:
- Overall, marketing budgets are on the rise.
- Marketing spends are leaning heavily towards digital efforts in lieu of traditional advertising methods.
- When compared to B2B companies, B2C’s tend to spend more money on marketing overall.
- When compared to larger companies, smaller companies spend more money on marketing as a percentage of their total revenue.
- On average, marketing budgets sit anywhere from 7-12% of total company revenue.
What is Internet Marketing?
Broadly answered, ‘Internet Marketing,’ or ‘Digital Marketing’ is simply the promotion of your business in the online world. Think of Internet Marketing as an umbrella term encompassing a multitude of advertising efforts. From Search Engine Optimization (SEO) and Link Building, to Pay-Per-Click (PPC), Email Marketing, Social Media and more, Internet Marketing works towards the same end-goal as any other marketing strategy… Sales!
Ever wonder how a certain company’s web page ends up at the top of the list on a Google search, when there are dozens of other brands offering the same thing? This is thanks to SEO. SEO requires consistent optimization of your website. It takes time, it’s harder than you think, and it’s even more important than you think. SEO is a competitive world as it ultimately controls the number of clicks and traffic you get to your website. And the more people that make it to your website, the higher the opportunity you have for sales.
Link Building refers to creating links from other websites back to your site. There are many types of links, and many ways to build them. However, it’s not as simple as it sounds and it contributes highly to SEO. Because a big part of your business ranking on search engines comes from the number of trustworthy links back to your website, it is highly important that your link building be done right. Simply put, More (Quality) Links = Higher Rankings.
Advertising online can take on many forms, and it is extremely effective at driving sales if it is done right. Some of the most popular, and most effective, ways of doing it are through PPC campaigns, Email Marketing campaigns and Social Media campaigns. Each of these requires a unique approach and expertise to maximize efficiency depending on your business strategy.
How Much Should You Spend on Internet Marketing?
Now that we’ve established what Internet Marketing is, and why it’s important, let’s dive into the question burning in every business owner’s mind… How much does Internet Marketing Cost? How much should you spend? Figuring out how much to spend and how to work it into your budget can be a stressful task.
The answer to these questions is, it depends.
It depends on who you hire, what your budget is, and what your expectations are. There is no standard price for internet marketing. Each firm, or freelancer, simply decides how much they feel their services are worth, and how much they want to charge. You want to make sure you get the most out of your marketing spend, so here are a few aspects to consider when deciding to begin implementing a digital marketing strategy.
Set A Budget:
Budgeting is one of the most important things to focus on when developing and executing a business plan. It is arguably the most important. The truth is, a business cannot run without a budget, and it cannot succeed without a marketing budget of some kind.
One of the best aspects of digital marketing is that it is highly measurable. Thanks to constantly evolving analytics software, web experts are able to pick apart everything that is happening on your website. We can pinpoint where your leads are coming from, which web pages are getting the most traffic, how long people are spending on each page, precisely the sales generated from your ads, and so much more! We can measure exactly what is working and what isn’t, and tweak the strategy and budget spend accordingly.
Here are a few questions to make sure you ask yourself when setting a budget for internet marketing:
- What Are My Needs / Goals? What Does Success Look Like In This Arena?
If you’re like any sane business owner out there, your end-goal is obviously profit. However, there are specific goals you need to focus on along the way as your business develops. Maybe right now you need leads, or maybe you’re a brand-new concept and you just need to get your name out there. It is important to be thorough and realistic when answering these questions. Sustainable success does not happen overnight, so be sure to set well-defined goals, both short- and long-term, and have a correlating budget for each step along the way.
- What Am I Currently Spending On Advertising?
No matter what the business, there is a cost you are currently accruing one way or another. This could be the cost of your website, design elements, office space, equipment… any number of things. So get out your calculator, pen and paper and get down to the nitty gritty of where you’re at right now. In reality, everyone has a ‘budget’ they just might not know what it is. When you know exactly what you’re currently spending, your marketing plan going forward will start to make more sense.
- What Is The Risk? How Much Risk Am I Willing To Take?
There’s always a little risk with implementing a new strategy. Maybe you decide to allocate $2,000 towards a new social media campaign, but in order for that to pay off you need to generate a certain number of sales. Well, until you go ahead with it, there’s no way of knowing for sure what your ROI will be. You want to find that balance between paying enough, but not too much, so the risk is manageable.
- Who Is My Target Audience?
Believe it or not, many business owners don’t clearly understand who they are selling to, who they have the potential to sell to, or who they should focus on selling to. Defining clearly both your current and prospective buyers is crucial. This will assist both you and your digital marketing agency in developing and implementing a budget and marketing strategy.
- What Does My Sales Funnel Look Like?
No matter what your product or service, there is somewhat of a journey buyers will go through to take them from a random person to a purchaser. It is important to figure out where and how your customers are being influenced. Knowing this process to a “T” will help you make the most of your budgeting efforts.
Choose The Right Marketing Partner
When it comes to internet marketing, deciding on the right agency to partner with is crucial. While there is no clearly defined formula telling you how much to spend and who to hire, there are certain things you’ll want to pay close attention to when feeling-out prospective agencies.
- Beware of Promises That Seem Too Good To Be True:
There’s no doubt about it, digital marketing can be tricky. That’s why you’re hiring someone to do it for you in the first place. While it may be tempting to hire the company that promises to get you #1 in Google rankings in the first week, this is simply ‘too good to be true.’ These types of things take time, especially if they’re done right and in a sustainable manner. Be wary of any agency making promises such as these. A good agency will take the time to get to know you and your business before they develop and present a strategy and perceived ROI to you.
- Beware of Long-Term Contracts:
While it is true that the ROI of many internet marketing strategies takes time and patience, there is no reason to lock yourself into a long-term contract. Just be sure you and your agency understand each other, have clearly-defined goals and realistic expectations. And be patient… Listen to what they have to say, and take their advice seriously. Remember: they’re the experts, ignoring their advice is a big waste of your time and money.
- Take Note of Their Level of Communication:
Communication is arguably #1 in any relationship. Your relationship with your digital marketing agency is no exemption. Keeping the lines of communication open is key to understanding each other’s expectations, and being sure you budget goes to the right places. Make sure the specialist you hire asks you a lot of questions, and consults you on their strategy plans in detail.
- Research Their Reputation:
A company’s reputation says a whole lot about the ROI you can expect from their internet marketing plan. Do your research, and find an agency with a good track record, and values which line up with your own.
As we’ve now established, there is no exact figure for how much you should spend on your online marketing efforts. It depends what you’re selling, what your competition is, who your audience is, and what your budget is. As a general rule of thumb, we recommend you start by allocating approximately 6-9% of your company’s revenue to internet marketing. If you’re a newer business and this seems too much, start smaller. Something is better than nothing, but remember to think of it as a long-term investment.
While you may start with a budget that seems risky or high, as your ROI improves and you become established, the amount you spend on marketing can be shuffled and decreased accordingly.
“It’s unwise to pay too much, but it’s worse to pay too little. When
you pay too much, you lose a little money – that’s all. When you pay
too little, you sometimes lose everything”
~ John Ruskin
In this day and age, digital marketing is a necessity for business growth. There are a variety of platforms with which to choose from in the realm of digital marketing. However, the expectation of any marketing strategy remains true across all platforms: let people know about your brand, increase their interest, drive them to your website (or social channel), and eventually convert them into a loyal, paying customer.
Thrive Internet Marketing is a full-service digital marketing agency. We believe in a multi-faceted approach, with a blend of marketing efforts to maximize your ROI. We won’t waste your money; our values lie in integrity and striving to build relationships with all of our clients in order to deliver the best results possible. Contact us today for a free consultation and learn how we can help you grow your business!