How much should your company invest in digital marketing?

Understand what percentage of your billing should use to promote the brand and attract new customers.

When it comes to digital marketing, many companies still see the allocation of resources for this purpose as an expense. However, when there is a solid strategy, with goals to be achieved, this type of resource should consider an investment.

The role of marketing is to strengthen the image of a brand or product, bringing more customers to a company. However, for these general objectives to be achieved, it is necessary to resort to specialists who define the strategies, that is, the short and medium-term objectives that can strengthen the company as a whole.

This behaviour applies to both small and large companies. Unlike what many people imagine, digital marketing should not seen as something just for “those who have money”. All companies, to a greater or lesser extent, need to look for ways to strengthen the brand and attract new customers.

How much to invest in digital marketing?

Although this is one of the biggest doubts of businessmen, there is no exact answer to this question. This is because before defining a value, it is necessary to take into account several factors such as the size of the company, the objectives listed in the planning and the available cash balance.

However, we can work with average values, considering the shares of other Brazilian companies. In general, surveys usually suggest that directing between 7% and 12% of sales to marketing is what happens the most. However, this value can, and in some cases must, be higher.

Note, however, that here we are talking about “marketing” as a whole, which includes both online and offline actions. Adapting this reality to digital marketing, everything will depend on the weight that online media have in attracting customers to your business.

Therefore, although this is not a rule, we can set the following percentages as parameters when it comes to digital marketing:

  • From 6% to 12% of revenues for companies already consolidated ;
  • 12% to 20% of sales to little-known companies or startups;
  • From 8% to 10% of revenues for companies with B2B operations ;
  • From 9% to 11% of sales to companies with B2C operations.

How to invest depends on expert analysis

In view of the reference percentages for investments, the decision on how much to invest is something that must debate by the entrepreneur and his managers. Some companies, with balanced accounts, may have better conditions than others, but the ideal is not to stray too far from the suggested ranges.

The big question is how to invest that amount. To answer this question, experts in digital marketing come into play,  Based on the available budget and the goals to achieve, a strategy is drawn up taking into account the vehicles, media and platforms that can help to maximize results.

Again, there is no “right” or “wrong” in this story. More investments will not necessarily bring better results, just as small investments are not a waste of time. Regardless of your budget. It is possible to achieve good results, within the limitations and scope that the strategy in question defines.

Measure returns and refine your strategy

One of the great advantages of investments in digital marketing is the ease of measuring results. If your strategy is to directly increase sales. Then keeping an eye on how much more your company earned during a campaign is a good indication of whether things are working or not.

However, it should note that “making more” is not always the main objective of an action. On several occasions. It may be that the company primarily wants to increase the number of registered users or even that it just wants to position its brand in the market.

For each main objective. There is a different strategy and although you can benefit from more than one aspect with your campaigns, it is important to always stick to the main purposes. Even without increasing sales, For example, a campaign can be a success if the main objective is to increase the audience.

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By Lisa Park

Elisa Goldstein is an experienced writer at financemag7.com, where she’s credited with more than 200 articles covering everything from entrepreneurial stories to mental health at work. She also oversees the Comment&Questions, which poses important admission questions to experts in the field, and regularly hosts webinars on various aspects of the business school experience. Prior to joining financemag7.com, Elisa honed her skills as a freelance writer, tackling a wide array of topics from petcare to car maintenance. Elisa holds a Master’s degree in Business Administration from the University of Brighton, England.

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