How to outline your Marketing budget? How much to invest in the digital strategy and how to calculate costs?
In this article we will try to explain how you can estimate the costs of a marketing campaign and what are the main characteristics that make digital a revolutionary event.
When it comes to money, some entrepreneurs tense up in a negotiation. When we talk about marketing prices, the problem arises from the fact that many web agencies do not make prices public.
BrandingBizz has always chosen the policy of transparency, following the logic that every product or service has a price, then each company can to decide to invest according to their objectives and budget.
How much is the “right” price for Marketing?
How much to invest in Marketing?
How can you calculate the Marketing Budget?
First of all, defining a Marketing budget is essential for every company, from micro-enterprises to multinationals. This is because in addition to providing a product or service you also need to let people know that they can buy it.
Generally, a Marketing budget is defined on the basis of several parameters, which are:
Number of employees
Company turnover
Company objectives: expansionist or protectionist
Behavior of the competitors: if the market is leveled, it takes very little to emerge
Kind of company: start-ups need to invest more because they need to get known
Growth expectations of the customer base: it is necessary to quantify them
Time frame for achieving goals: short term or long term
Outlining a Marketing budget is not a simple matter and there is no fixed rule, the parameters to be taken into consideration are numerous.
Our experience, gained in over 25 years in the sales and Marketing sector, always leads us to advise our customers to invest in the Marketing of their services and products by following some simple and effective rules:
How much to invest in Marketing:
The golden proportion with respect to the forecast turnover to be obtained:
The ideal Marketing budget is 5% to 10%
Around 5% for companies that are in a market that is not too competitive and that want to keep their shares.
Around 10% for companies that want to increase their market shares or in case there is a lot of competition in the sector and therefore they need to gain a higher visibility than their competitors.
Startups should always invest between 20% to 30% on average in the first 5 years, to stand out from more established realities and also simply to make themselves known.
EXAMPLE
If my revenue is € 1,000,000, I could decide to invest 10% (the maximum of the golden ratio) setting myself a goal of at least the same forecast turnover.
If, on the other hand, I foresee, because I set it as my main goal, to increase my turnover from 1 million to 2 million, then I have to budget 10% of 2 million of Marketing budget.
What happens if I do not invest enough?
Well, it will simply take longer to obtain the same results, compared to those businesses that, for the same activity and sector, invest a higher budget.
If you invest 100 and your competitor who has a business identical to yours a few steps from your office invests 100,000, it is obvious that he will have enormous visibility in a short time.
This reasoning is especially true in activities and sectors in which the market has reached a point of equilibrium, an alignment between product, price and service.
Sometimes entrepreneurs don’t really realize how essential it is to provide a good investment plan in marketing that really lets their businesses stand out and finally approach a point where sales could take off, increase their customer base, beat their competition and thus succeed in conquering a good share of the market.
A good investment in Digital Marketing, if made by choosing the most innovative methods and following the right communicative strategy, leads to a return that is impossible to obtain in any other way.
Pro tip: if you still don't have a performing and responsive website, and need to keep your marketing costs low, here's an cost-effective tool you might want to consider:
Website builder: Strikingly
This website builder allows the user, with little or no development experience, to create mobile optimized websites. It is
easy to use
high customer support satisfaction
powerful e-commerce management
If you still have questions we would be glad to answer, just send us an email at