The ultimate marketing budget plan: how much should your business spend on marketing?
It’s a question that’s plagued marketing departments and small business owners since the dawn of time. How much do you need to spend on marketing for your efforts to be effective?
And so as you can probably guess, it’s not a question with an easy answer, although we’re going to do our best to provide you with one in today’s article. Along the way, we’re going to take a look at the most common types of marketing and their average monthly costs, and we’ll provide you with a full breakdown at the end if you want to do a little bit of everything, although most people prefer to pick and choose.
Are you ready? Let’s get started.
How much should a small business spend on marketing?
The first thing to say here is that this is a sort of “how long is a piece of string” question. You can spend as much or as little as you like, but bear in mind that the results that you receive will depend upon the amount that you spend.
This means that while you can cut corners and do things cheaply, it will have an impact on the results that you can expect to receive. On the plus side, you can also make your budget work by prioritising where you spend and ensuring that you track everything and keep an eye on your metrics.
You should think of marketing as an investment in the future, and if you don’t have the money then you can often invest your time instead. Set yourself a budget or carve out some hours in your schedule, then stick to it.
How much does marketing cost?
Now that we’ve given you our disclaimer and told you that it’s hard to actually put a price on marketing for small businesses, we’re going to give it a go anyway. We’ve taken a look at typical prices across a range of different disciplines to give you a better idea of what you’re likely to spend.
Let’s take a look at a breakdown of agency types and rough costs:
Email Marketing ($3,000-$8,000, One Off): Email marketing is an ongoing exercise that’s all about developing a powerful email list and reaching out to your customers on a regular basis to generate income. This one-off cost will cover the strategy and the launch of a data capture form, as well as the creation of initial flows and automation.
Visual Branding ($2,500 – $5,000, One Off): Visual branding is exactly what it sounds like: the art of determining how your brand will use images to tell its story. This one-off cost will cover the creation of a set of visual branding guidelines, and if you opt for the higher end then you can also expect a logo and other visual assets.
Website Development ($5,000-$6,000+, One Off): These days, if you don’t have a website then you don’t exist. That’s why it’s so important to hire a professional website developer instead of trying to put something together yourself using a tool like WordPress or a website host’s drag-and-drop designers. Web development is usually a one off cost, but you may also need to pay a monthly retainer if you want them to make ongoing updates on your behalf.
Amazon Marketing ($3,000, Monthly): Amazon marketing isn’t for everyone, but if you’re an Amazon seller or a manufacturer who uses Amazon as a primary distribution method, it can be a great way to boost your sales on the marketplace. An Amazon marketing agency will typically spend the first month optimising your product descriptions and setting up ads, and then your budget for the following months will mostly go towards running the ads.
Google/Facebook Ads (Retainers $1500-$5000, PPC budgets $2,000-$20,000+, Monthly): Google and Facebook ads are just two of the most common options, and you may also want to look at advertising on other search engines or social networking sites. It’s a great way of bringing people to your website and has the advantage of driving traffic immediately and being highly measurable. Your retainer with an agency will typically cover both the actual advertising costs as well as the agency’s management time.
Search Engine Optimisation (SEO) ($1,500-$10000, Monthly): Search engine optimisation is the process of making your website as easy as possible for a search engine to understand. An SEO agency will typically tackle this in a variety of ways, including by establishing inbound links, working on your meta titles and descriptions and creating quality content.
It’s also important to note that while many of these are one off costs, small businesses can often benefit from taking out a retainer. For example, while you might pay a website development agency to build your site for you, it can also help to take out a retainer so that they can continue to tweak and update it for you over the months and years to come. Also note that these are very standard level pricing, there are much higher costs as you move to more experienced and niche agencies.
And so perhaps you’re already starting to see why it can be so difficult to put a flat cost on some of these services.
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Marketing Budget Breakdown Plan
Based on the costs that we outlined above, we can now start to pull together a menu of costs that will help you to plan out how much you’re going to need to spend. Here’s a rough breakdown of what you’re looking at:
One-Off Costs: $14,750
- Email Marketing ($5,500)
- Visual Branding ($3,750)
- Website Development ($5,500)
Monthly Costs: $6,500
- Amazon Marketing ($3,000)
- Google/Facebook Ads ($2,500)
- Search Engine Optimisation (SEO) ($2,000)
Assuming that you opt for the full menu and take on all of the one-off costs as well as all of the monthly costs for a period of twelve months, you’re looking at $104,750. That might sound like a lot, but that’s not much more than the annual salary of two marketing employees – and you’ll struggle to find two marketing execs that can tick off all of these skills between them.
On top of that, few small businesses will opt to go the whole bag, and in fact it’s rarely the best use of your resources. Instead, it falls to you to decide which disciplines are going to provide you with the most value and to go from there.
Ready to take the next steps and to start shopping around some of the different agencies that are out there? That’s where we come in!
Get in touch with us today to let us know a little bit more about your budget and your needs so that we can help to match you up with the perfect agency suppliers for you. We look forward to hearing from you!