In 2018, investing in digital marketing will continue to be the most fundamental decision for any business. However, how do you decide what to invest in digital marketing and what digital marketing budget is the right amount?
Digital marketing investment will vary greatly depending on the type of project in terms of its desired objectives and outcomes. There doesn’t exit any magic formula, it’s all about analyising the figures and deciding what is the most adequate for your business.
Investing in digital marketing is a certainty if you want to see a good start to 2018. In general terms, we can say that a company’s digital marketing budget should be between 8% and 12% of its annual turnover, depending on how interested you are in strengthening your business online. This could be divided in the following way:
- Social media: this should be one of the main parts of your digital marketing investment, at around 4%, given that in 2018 it is predicted to be even more influential. It is said that an average of 30% of the time a user spends online is on social media, making it the perfect approach for your business. Furthermore, it is proven that social networks will be a good source of lead generation in 2018.
- Google Adwords: bidding for keywords that are relevant to your business continues to be an essential digital marketing method in 2018. That said, 2% of your budget should be allocated to pay per click advertising (PPC).
- Search Engine Optimisation (SEO): another 2% to 4% should be a sufficient amount to invest to progressively improve the position of your website in search engines, veering more towards the upper value of 4% if you plan to include content marketing as part of your SEO strategy.
- Email marketing: this tactic should not be missed out of your online marketing strategy and you should look at allocating another 2% of your budget on it. Through email marketing we can achieve ongoing contact with our customers and target market to build their loyalty over the long term.
You can always invest more in digital marketing
Although you may have already decided to dedicate a fixed budget on digital marketing, the reality is that it’s always a good decision increase it. But up until what point? Experts recommend that you should not spend more than 20% of your annual revenues, in which case, the return on investment (ROI) can reach its limit.
However, a concerning statistic is that 49% of companies do not have a clearly defined digital marketing strategy, so please note that when considering your digital marketing spend, it is important to also put a plan in place to ensure that your money works more efficiently and continues to provide a positive ROI.
So how will other companies invest in digital marketing in 2018?
According to recent surveys, 52% of companies which have already decided their digital marketing investment for the coming months say that they are going to increase their budget in content marketing this year, 9% of them say that it will be a significant increase, and 17% will maintain spending the same amount. Only 1% of the businesses surveyed said they would reduce their digital marketing budget this year.
Furthermore, digital marketing spend is escalating in comparison with traditional marketing budgets. 41% of businesses have concluded that they save more investing in digital marketing compared to their traditional marketing investment. 28% decided to reduce their budget in traditional marketing in favor of digital marketing and 21% invested more in digital marketing obtaining funds from other areas of the company.
In conclusion, we know that all companies need to invest in digital marketing if they want to grow their business online and increase sales revenues, and our recommendation is to allocate a minimum of 8% and a maximum of 20% of your annual income. Of course, the actual amount will depend on the type of business whether it’s B2C or B2B for example, as well as level of competition that exists within your industry, so the higher intensity the competition the more you are likely to have to invest. However, if you are unsure what is right for you it is best to speak to an expert in online strategy who can review your individual case and advise on which investment amount is best for your business.
Have you thought yet about how much you will invest in digital marketing this 2018?
Leave a comment and tell us more about your future plans!