How Much Advertising Budget Should You Spend Online?

By | February 27, 2019

I understand your small business dilemma. You only have so much budget for marketing each month. You can’t spend it all online.

That’s true. And I wouldn’t suggest that most small businesses with a local presence spend their entire advertising budget online, but you should be spending some of it online. The question is, How much?

First, let’s discuss how much you should allocate to marketing in general. You should earmark 15%-20% of your revenue each month to marketing. In other words, if your company brought in $10,000 last month then allocate somewhere around $1,500-$2,000 next month to your marketing or advertising initiatives – online and off line.

That’s just a figure. Spend more or less depending on your individual circumstances. Do you have a lot of overhead? You might have to spend less. Is most of your profit free and clear? Spend a little more. But how much should you spend online?

If you are new to online marketing then you’ll have to do some testing. Don’t just jump in and start spending money wildly. Take some time to understand the principles before you get too deep into it. But you should be doing some online marketing. I would recommend that you start with 10% of your total marketing budget to online marketing and test a few things to see what works best for you. Then you can slowly increase your online marketing budget to 50% of your total marketing budget, cutting out those off line marketing efforts that aren’t working as well as they used to.

If your total marketing budget is $2,000 per month then start with $200 per month as an online budget. Let’s say you decide to build a website and SEO it for best performance in the search engines. After that you’ll need to do some other things to market your business. Examine your options and see which online marketing methods might suit your business goals and needs. As your online presence grows, you can increase your budget and cut off the off line marketing measures that are making you less in terms of ROI. Do this until you reach 50% of your total marketing budget being spent on your online marketing. Keep only those offline marketing efforts that are making you money and cut the rest.