Undoubtedly one of the very first and most common questions of a business owner is what is the ideal digital marketing budget. How much should I invest in digital advertising? In which channels? And what results can I get? Well, there are many factors to consider when deciding your budget and fully leverage all those channels that make sense to your business. And of course without burning your money!
Let’s have a look to most important ones:
Competition: Budget depends definitely on your target market and how competitive it is. If for example your product/service belongs to a highly competitive target market then you obviously need more marketing budget to invest in. High competition means higher ad spend and you need a certain budget to be competitive on ad auctions.
Country Market: Different markets have different needs. The budget you need to spend might differ across countries. 1000$ Budget can be a good spend for Greece but insufficient for the US. USA, UK and Australia are usually the most expensive target markets.
Audience Size: The larger your audience the higher your budget. And that makes perfect sense. Just make sure you adjust your budget based on this. 200€ might be all right for a Remarketing audience (e.g. 20.000 people) but definitely not for a cold audience of 400.000 people. On the other hand, if you are investing large budget in very small audiences, always check frequence levels and cpcs. Use your budget accordingly to maximise your results.
Number of Searches on Search Engines: Google keyword research and many useful tools give data about queries on google and other search engines. Leverage this information and build an effective plan based on that data. If there is high search interest for your product then you will need more budget to be shown on top paid rankings. With simple calculations you can estimate a sufficient budget you need in order to be shown to a certain amount of people.
Advertising Platform: Google in general needs more budget than Facebook Ads. Facebook ads have lower cpcs and cpas but again it depends on the industry and the competition. Linkedin also needs much more budget as it offers very targeted options and cpcs can reach to 7-8$! But remember you need to be where your audience is. If Linkedin is your platform then your investment should focus on it.
What is for sure, is that initial research and historical data are the key for an effective budgeting. You can start from a certain budget and gradually scale depending on your results. Scale should be gradual and up to 20% every time. Algorithms need time to pay-off for every change so make sure that you give it time.
Any more ideas that impact the digital marketing budget? Feel absolutely free to share!