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Start-Ups

4 Reasons Your Small Business Needs an Online Marketing Budget

By Barbara Beauregard   |    February 22, 2016   |    10:26 AM

Your Small Business Needs Online Marketing… Here’s How to Get Started

Now, more than ever before, your potential customers are shopping for and researching information about products and services online. There’s tons of competition in the search engines, and having an online marketing budget and a plan is imperative to making sales from your online presence.

There’s more to it than just having a domain name, so keep reading to learn four reasons why you need an online marketing budget, plus actionable information about how to set your budget.

1. Your competitors have an online marketing budget

Savvy businesses know that online marketing can offer a substantial return on investment, so it’s very likely your competition already has an online marketing budget. You certainly can get away with low-cost online marketing strategies, but being willing to spend a bit can amplify your successes and fast-track results.

2. Most people search online before making a purchase

97% of all consumers do an online search before making a local purchase. Can your business afford to miss out on all of those opportunities? Probably not, which is why having the time and money for online marketing is so vital in today’s business environment.

3. There’s tons of competition on the Web

How much competition, exactly? Well, there are nearly 1 billion websites on the Internet, so it’s safe to assume that the competition is fierce. Getting found amongst all of this competition is a daunting task. You absolutely need to focus on online marketing if you want searchers to find you and your products or services.

4. If you hire an expert you’ll get help making tough decisions

If you’re too swamped to handle online marketing in your business, and you don’t have a staff member who can take on the task, consider hiring an outside person or agency. These experts will know exactly how to use your budget to get the most impact and you won’t have to spend time learning about and testing different techniques. Plus, these experts typically get better results faster than you could on your own.

How to create your online marketing budget

When it comes to online marketing costs vary widely, so you’ll need to determine what your needs are. Do you want to focus on Search Engine Optimization and Pay-per-Click advertising, for example? Well, what you need to spend will vary based on your industry and how competitive the online landscape is. Here’s some advice from the experts at Conversion Pipeline:

“Every industry and company is different, so you should adjust the percentages accordingly, based on your specific business plan. If your company is B2C, you should raise these numbers by 1-3% to see desired results. Most Pharmaceutical and Retail companies spend a significant amount more than the averages. These industries will generally spend around 20% of annual sales on marketing. Where companies focusing on sales only to a Government or business with a particular niche-market may deduct 1-2% from the above figures.”

Conversion Pipeline also states that surveys show that the average small business marketing budget is approximately 5% of total revenue. Other companies suggest 10% or more, but the ultimate goal is to establish a budget that you’re comfortable with and that also gets you results. If you aren’t sure what online marketing tasks you can complete with a limited budget, this list has some excellent tips for small business online marketing on a budget. Reading the list may even inspire you to carve out some cash for online marketing.