How Much Should You Spend on Marketing?

Whether you have a start-up, a small business or running a multi-national business, your business heavily relies on marketing and branding through, say through websites in order to ensure a high return on investment. So how do you allocate enough resources to marketing? One word, budgeting. Below are some budgeting tips a business should consider to ensure proper allocation and spending.


Allocating Marketing and Branding Budget

According to a recent report put together by SBA Research, a small business with a revenue of less than $5 million commands an allocation of 7-8% of such revenues invested in marketing with 11% being the average marketing allocation. For startups, a 3-5% of revenue should be allocated to marketing. Companies wanting to see major growth, the average is 35%. Search engine optimization is expected to capture a larger share of online marketing and branding, with online display such as ads and video expected to also command a large marketing share. Social media marketing is also expected to grow; however, it will only command a 15% of the total online website marketing share.

Based on a survey that was conducted on 295 global business leaders during the month of January in 2016, of which 72% have headquarters in the United States, email marketing had the most allocation of resources with 59.7%, with social media coming in second with a 56.3% allocation percentage or marketing and branding resources. Online display advertising such as video, ads was third with a market spending of 55.9%. Mobile marketing had a market spending of 51.9% while SEO/PPC averaged 42.4%


Digital Channel Investments

According to an August 2016 report by eMarketer, over the next 1 year, respondents are expected to increase their budget in the following areas.

  1. Google Adwords – 75 % of respondents are expected to increase investment in Google Adwords.
  2. Mobile – An almost similar allocation of marketing resources to Google Adwords, 73% of respondents are expected to increase their mobile marketing and branding allocation.
  3. Facebook –69% of respondents are expected to increase their Facebook marketing and branding investment.
  4. Display (ads, video) – Over the next year, 39% of respondents are expected to increase investments in online display.
  5. Snapchat – Only 15% of respondents mentioned that they would increase marketing investment on Snapchat, mainly because it recently launched its ad platform.
Comparison between Traditional and Digital Market Spending

According to a survey by smosurvey.org, there exist strong differences in trends between traditional marketing and online marketing. The report suggests that digital marketing has consistently doubled in investments year after year. What does this mean? Businesses are now spending branding resources more on websites, online display such as video, as compared to traditional means such as radio/TV and print media, a trend that is expected to last for years to come.

If you are unsure where to spend your advertising dollars, the filmMED team can analyze and research your brand to optimize your spend on marketing and advertising. To learn more send us an email at Hello@filmMED.com


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