Is Your Marketing Budget In Line With Your Industry Peers Or Are They Leaving You In The Dust?
Ah yes, budgeting. One part data, three parts crystal ball. Are you hitting your marketing metrics with your current marketing budget? How does your digital marketing budget compare to your industry peers? Would you like to know?
Obviously, your company is unique, and there are no hard and fast rules when it comes to marketing budgets or strategies. Much will depend on your marketing goals as a company, and your company’s commitment to marketing as a strategy. Are you trying to maintain the status quo, or on a mission to grow the business?
Today’s digital marketing landscape necessitates an easy-to-navigate, high-performing website, a well executed content marketing plan and a solid CRM. These are the basic building blocks to ensure the status quo with digital marketing.
Does your company meet the status quo?
Clearly, we’re in no position to provide answers when it comes to your marketing budget, but we CAN provide you with marketing industry benchmarks.
Using current CMO Survey data (as of August, 2019), broken down by industry we’ve created our 2019 Marketing Budget Calculator to give you a benchmark to compare yourself against.
Plug in your annual revenue number, and your industry and see how your marketing budget and digital marketing budget compares to others in your industry
Traditionally, a marketing budget of five percent of revenue to maintain, ten percent to grow are often the magic numbers you’ll hear floating around. That might be a good guideline for you. It might not.
If your focus is on what you’ve spent the last two years, instead of what your company is trying to achieve with marketing, you could be jeopardizing your marketing success.
Now, obviously you’re savvy enough to not base your marketing budget on a marketing budget calculator. I get it. Oh, if it were just that simple.
Company goals, philosophy, executive leadership, maturity levels, finances, market size, audience, reach, among many other factors all come into play.
But….it is often eye opening to compare against industry data, isn’t it? It’s often VERY eye opening when I have these conversations with clients or potential clients.
I sometimes run up against this one:
In other words, there is NO marketing budget. With smaller businesses, this isn’t uncommon.
If the bulk or all of your business comes from word of mouth, you’re not spending enough on marketing.
Yep, you’re definitely leaving food on the table.
You just don’t know what you don’t know yet. That’s all.
If you work with a top digital marketing agency, who’s good at what they do, you’ll wish you’d invested in internet marketing sooner. Guaranteed.
That’s not to say that many of these businesses aren’t successful, thriving businesses. They are, in many cases.
At least for now, that is.
Does Your Status Quo Ever Change?
What happens when the economy sours? What if you lose your top three accounts? Have you ever had a downturn in business? Would you like to grow, or are you happy where you’re at? Do you ever plan on bringing a new product or service to market? Are you confident you can maintain your existing business into perpetuity?
These are the types of questions that companies should be asking themselves.
I’m always surprised at the number of companies I talk to that really aren’t spending any money to speak of on marketing. In some cases, marketing, or digital marketing services are viewed as an expense, rather than an investment in the business.
For many smaller companies, they don’t even have a budget line item for marketing expenses, let alone digital marketing services.
As more of the marketing budget is shifting to digital marketing, many companies are scratching their heads wondering how much to allocate to digital marketing. What’s a good number? How do you know how much money to budget for a new website design, SEO services, email marketing, or internet marketing services?
Still today, many companies are trying to navigate these waters, learning what works and what doesn’t in the digital marketing space. I will say this.
In my experience, lack of digital marketing success typically stems from a lack of proper investment and working with the wrong digital marketing agency. Example:
Company: “We tried SEO services with another agency, and it didn’t work”.
Me: “What was your monthly budget?”
Company: “300 dollars.”
Me: “That’s why it didn’t work”.
In many cases, the monthly investment isn’t nearly enough to give the marketing activity a chance to succeed. And shame on that internet marketer or marketing agency for taking their money.
I’m not just talking about search engine optimization. Far too often I see money flushed down the toilet with an underfunded AdWords campaign, a poorly done website design project, a half-assed attempt at content marketing, or social media marketing.
Sadly, there are all too many website or marketing agencies who are all too happy to take your money, knowing they can’t deliver.
When money is tight, I’ll often advise others on how to help themselves.
An ethical SEO agency, or digital marketing company will walk away from an opportunity that has no chance of success, rather than pocketing monthly checks, knowing failure is certain.
If you’re a business owner, CFO, or marketing professional, take a look at your own company. The data is real, and if you’re severely underfunding your marketing efforts, you’ve got a great opportunity in front of you!
Hopefully, this gives you a starting point to work with, to help guide you to marketing success!
Oh, and if anyone needs a calculator, I’ve got an extra!
Or just have a question? Drop us a quick message…
Want to learn more? Hyper X Design is a digital marketing company in Minneapolis, offering both website design, and digital marketing services including search engine optimization services. Interested in a complimentary website assessment to help you put a plan in place to improve your digital footprint? If you’re not sure how to move forward, this complimentary website assessment will provide you with a wealth of information to help you decide the best path for your company.