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Is A Big Budget Needed for Digital Marketing?

Is A Big Budget Needed for Digital Marketing?

Like any aspect, it always relies on what terms of digital marketing you’re going to add to your plan.

The good thing is for those who already own a website, don’t need very much budget, if they are focusing on inbound techniques like SEO, social media, and content creation. Using inbound marketing, the main aim is to create high quality content that your audience like to consume, the only investment you’ll need is your time, if you do not want to outsource the work.

Using outbound marketing techniques such as online advertising and purchasing email lists, incur some expenses. The costs you give will convert it as a result of the advertising.

For example, to implement PPC using Google AdWords, you’ll try strategies against other companies in your niche to come at the top of Google’s search results for keywords related to your business. Depending on the aggressiveness of the keyword, this can be logically economical, or very expensive, which is why it’s a good idea to focus building your natural reach, too.

How much should you spend on digital marketing?

Now that you know it is productive to spend on digital marketing, the question is how much do you spend.

The answer to this question depends on many factors like your overall plan as a business, your vision, estimate of your current growth rate, capital, revenues, current P & L, etc., if you do some scrutiny on industry swings, perhaps, you can arrive at an suggestive percentage. This could help you start moving in the correct direction. 

1. Marketing Budget = 10% of Company Revenue:

Marketing budgets remain constant at >10% of total revenue.


2. Digital Marketing Budget = 25% of Marketing Budget

Many companies still have an isolated budget for digital marketing, which consists of 1/4th of their total marketing budget, on an average. 

3. Breakup of the Digital Marketing Budget – Website Development, Content Marketing & Digital Advertising

Content marketing and website development tied for approximately 12% of the budget, Digital Advertising is the highest area of digital spent 13% of budget.

From the above 3 research statistics, we can infer the following:

·    Marketing Budget could be 10% of the total revenue

·    Digital Marketing Budget could be 25% of the above marketing budget

Break up of Digital Marketing Budget

·         13% for digital advertising,

·         12% for content marketing

·         12% for website

The balance 63% is assigned for infrastructure and team costs, which might include outsourcing an agency, recruiting a manager, software, digital marketing maintenance, monitoring, technology, measurement, management, research, posting, engagement, etc.


Let us take an example that your total generated revenue is $2 million, and if you move according to the above formula, your marketing budget’s breakup will look like this:

·         Marketing budget – $2,00,000 (10% the total revenue)

·         Digital Marketing – $50,000 (25% of the marketing budget)

Breakup of Digital marketing budget

·         $6,500 for digital advertising

·         $6,000 for content marketing

·         $6,000 for website

·         $31,500 for infrastructure and team costs – which might include all other factors.

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Last updated:3/19/2018 6:39:20 AM


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