How much should I spend on marketing?
During the last couple of months, I have heard variations of this question. First, marketing shouldn’t be a spend or expense item. It is supposed to be an investment. Sometimes we get a great return and sometimes we don’t get any return, but it is an investment nonetheless. But, how much should a business invest in their marketing budget and how much of that should be invested in digital?
Generally speaking, 5-15% of your gross revenue should be invested in marketing and 25-30% of that should be digital. But, there are a lot of variables. How established is your business? Where can you connect with your target market? What are your competitors investing and where are they investing it?
You can answer the first question. Larger and more established businesses typically invest less of a percentage of revenue in marketing. Some industries have greater investments than another.
Persona Research and Competitive Analysis
Developing persona’s for your desired clients can help answer the second question. Persona research will create images of your ideal clients by providing the answers to questions like these:
- What are their relevant characteristics and behaviors?
- What demographic information is relevant?
- What is their job? lifestyle? hobbies?
- Why would they want to buy or use your products/services?
- What problem should your product/service solve?
- What benefit does the persona want to achieve?
You can have a digital agency perform a competitive analysis on your top 5 competitors and get the answer to the third question. This should include:
- How is your competitors website? Is it mobile? How fast is it? How often is it updated?
- How are your competitors ranking for key search terms in your industry?
- How much are they investing in pay-per-click advertising on the search engines and social media?
- How much are they investing in their social media presence and how is that paying off?
So, how much should you spend on marketing?
You should look at your goals and then examine what you are willing and able to invest to achieve them.
Read this article to learn what the likes of Apple, Microsoft, Twitter, Google, and Constant Contact are investing in marketing.
About the Author
Dave Hall owns AllRevedUp Internet Solutions powered by WSI, an Independent Digital Agency located in Colorado Springs, CO which is connected to the WSI network.
WSI is a digital marketing company with a strong international presence. Our Digital Marketing Consultants use their knowledge and expertise to make a difference for businesses all around the world. Headquartered in Toronto, Canada, we also have offices in over 80 countries. We’re a powerful network of marketers who strive to discover, analyze, build and implement digital solutions that win digital marketing awards and help businesses succeed online.
Over the last 20 years, WSI has won multiple digital marketing awards for our solutions by adapting to the constantly shifting landscape of the Internet. We take pride in helping businesses make the most of the dollars they spend on digital marketing.