A few decades ago, Yellow Page ads ruled the day. Perhaps you also sent out a few brochures. That, my friends, was your marketing budget. Nowadays, not only is a large chunk of your marketing dollars dedicated to online efforts, but there are dozens of channels and tactics you can consider.

How much should you budget for each? Which should you avoid? How do you know if you’re overspending, underspending, or spending the right amount? And when Google ultimately changes how the game works, how do you account for that in your budget?

These are difficult judgments to make, and there are no easy answers. Realistically, it’s important to understand your own personal business needs and budget accordingly. Here are some key considerations to keep in mind as you do just that:

1) How fast do you need profits? 

Most digital marketing tactics don’t offer a quick return. Yes, we’re a digital marketing company, but that’s the truth. Social media, SEO, content marketing, website redesign…they all typically take at least 6-12 months before you reap any benefits, possibly even longer.

With this in mind, know that pay-per-click (PPC) advertising can win you qualified leads within a month’s time. Since it’s not as cost-efficient as other strategies, you may want to hit this aggressively at first before channeling less of your budget here in the future.

2) How much should you spend?

Public companies spend anywhere from 5-15% of their total annual revenue to increase their growth—with 10% as the average. Public companies that spend less than 5% of their annual revenue experience slow growth, if any at all.

Furthermore, it’s reported that even mediocre marketing programs bring in $10 in revenue for every $1 spent. You can refer to these guidelines when deciding how much to spend.

3) Where should you direct your dollars?

When planning their online marketing budgets, SMBs should lay out their overall strategy and prioritize based on challenges facing their business.

Suffering from low brand awareness? Enlist the help of micro-influencers or launch a “remarketing” campaign targeting previous website visitors (for example). Having trouble inspiring potential customers to engage with you online? Employ a personalized approach across marketing channels to connect with prospects on a one-on-one basis. Short on cash? Outsource your digital marketing needs or use analytics/ROI tracking tools to employ a proactive vs. reactive approach and get more bang-for-your buck in the long term.

You get the idea…

Online Marketing Works…You Just Have to Budget

Just like anything else, you get what you pay for. Online marketing offers high ROI, but you must be willing to properly budget for the same to make it happen.

Only you can decide exactly what your budget should be, and you are now equipped with relevant perspectives and information to make the most sensible decision for your business.