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How to Set your Business’s Digital Marketing Budget

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Managing any type of budget takes self-discipline and commitment, and a small business’s digital marketing budget is no exception. This is because it takes spending money to make money. Add a couple of mistakes to the mix, and you can get into a bind in the blink of an eye. This article will discuss tips to determining and managing your marketing budget for your business.

When it comes to marketing budgets, we like to think of spending in terms of balance. Marketing is majorly focused on creativity and testing to see what works for your unique company. But be careful, too much of a good thing can turn bad. The last thing you want to do is run out of money trying to grow your business.

This article discusses how you can navigate your small business’s marketing efforts to ensure you are sticking within budgets. 

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Hire the Best Digital Marketing Fit

work meeting

Hiring the right person for the job is crucial when it comes to sticking to a marketing budget. We advise any company to shop around AND have a budget before ever hopping on a discovery call with a marketing professional.

Hiring the wrong fit for your marketing will end up costing you so much more in the end.

But the good news is, you have plenty of options to consider such as doing it yourself or hiring a W2 employee, freelancer, or agency. I have briefly listed the pros and cons below:

Doing marketing yourself as a business owner:

Pros:
Can save you on upfront costs.
Cons:
Digital marketing comes with a pretty big learning curve, mistakes will happen, and it will steal your time away from other tasks and sometimes those mistakes can also be costly.

If you want to save some cash and do your small business marketing yourself, here are three digital marketing tasks that require no experience to get started!

Don’t forget you can also leverage professional AI software to help you generate content faster and more efficiently.

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Hiring a digital marketer internally as a W2 employee:

Pros:
Will have a close relationship with the owner.
Will have a deep understanding of the company.
Will be easy to get in touch with, with a quick turnaround time.
Can grow into a position to delegate tasks to other marketers down the line, such as other employees, freelancers, or agencies.
Cons:
W2 employees are typically expensive.
Most marketers do not know how to do everything, so you will be either limited on what you can do internally or spend additional to get the work completed.
It can be a challenge finding work to fill up full-time hours if you are starting small.

Hiring an agency for marketing services:

Pros:
Agencies are liable to deliver what is contracted on a consistent basis.
Your marketing will likely follow strict guidelines to bolster a brand image consistently.
Your marketing will be managed by a team vs. one person.
You can typically expect positive results.
Cons:
Agency work can sometimes be generic in approach, so do your research and ask for samples of work.
Agencies typically start at $100+ an hour, so this can be a scary price tag to glance at. However, with expansive skillsets and fast turnaround, $100 is more affordable usually than a full-time employee.

Hiring a freelancer to do your marketing:

Pros:
Likely the most cost-effective approach to marketing.
Freelancers are experts in their own niche so you can find incredible talent through sites such as Freelancer and Upwork.
Cons:
Unless you have a designated person to manage your marketing, you will need to provide strategy and direction for a freelancer. They are not contractually liable, so you may hire new people often.

Be Aware of Digital Marketing Up-Selling

A man paying something on his notebook

We do it, you do it; the inner salesman in us all loves to upsell. Why? Because it can help us generate healthy profits and will likely provide you with improved results!

And although we have probably all dealt with an unethical sales representative at least one time in our lives, I truly believe that most of us upsell for good reasons.

However, we urge you to think twice before signing the dotted line and increasing your marketing budget. Simply put, ensure you have the funds to support the increase in effort.

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Measure Digital Marketing Efforts And Trim the Fat

Report

Viewing reports of your marketing efforts is the only way to know if your actions are working. There are two main challenges to reporting, however. 

Reporting Challenge #1, Seeing any trends will take time. 

In terms of measuring most digital marketing efforts, I would suggest giving 90 days for a report to show any results and then another 90 days to see the rate of changes. That is 6 months of waiting to see if something is actually working! It’s a long time and could be a lot of money, especially for new businesses with tight margins. 

When making budgeting decisions for digital marketing services, keeping this timeline in mind is crucial to ensure you can afford this testing period. 

Reporting Challenge #2, Measure the appropriate KPIs.

Key performance indicators (KPI) should be how you read reporting, but we rarely do this as small business owners. Instead, we get distracted by vanity metrics.

Vanity metrics are the data points that make us feel good: think followers, likes, shares, and comments. Although there can be some correlation between vanity metrics and success, these numbers rarely show profits and growth.

For example, we once had a client with a very old website. They wanted to increase their conversion rate for contact form submissions, in other words, increase leads. 

We did keyword research and found that they were using terminology that was more relevant to a product they didn’t offer. So with slight adjustments, we started creating content for their highly specialized offering and stopped using highly competitive generic terms. 

The result was that they decreased in traffic but increased in form submissions. Why? Because people who were actually searching for them were now able to find them and get in touch. Were they concerned with the decrease in visitors? Absolutely, at first. But traffic is a metric that makes you feel good, not one that necessarily means money in your pocket with a handful of hot leads.

If you are measuring strict KPIs and you still aren’t seeing them improve, cut your losses on the strategy and re-allocate your marketing budget to the things that have been proven to help your company grow.

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Keep your books clean

Revenue

This is less about digital marketing and more about preaching a concept that takes many too long to learn. Clean books help companies make wise financial decisions.

The US Small Business Administration recommends businesses with revenue less than 5 million should only allocate 7% – 8% of revenue to marketing. Managing your marketing budget comes down to knowing what you can afford, which a bookkeeper can go in and organize your finances to help you determine what can be afforded and when to cut or increase budgets. 

Simply put, clean books ensure you are leaving no money left on the table to invest in growth. And if you don’t have time to do your books, you can hire 1099 contractors to help out, sometimes only needing a few hours a month. 

Final Thoughts on Managing Marketing Budgets

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When it comes to success in marketing, it can often come down to trust and partnerships. The reality is that if your company continues to grow, you will reach a point where there is no way you can do everything alone. 

Finding people, whether employees or contractors, that understand your goals and stick to plans that support them is the best way to allocate your resources for marketing.

At Bizop Media, we are an agency that helps companies grow through organic marketing strategies. If you want to learn more, request our media kit below and check out our solutions page.

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Alexandria is a Bizop co-founder and marketing director who specializes in marketing consultation, creative strategy, and project direction.

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