Apart from determining the best marketing strategy, you must also know your budget for digital marketing, especially if you are a ‘Business to Business’ company. Budgeting in marketing has been the most significant concern for all types of businesses since time immemorial. However, you can have a fair bit of idea if you follow the recent trends and data on marketing.
Most people think that digital marketing needs minimal money, and therefore budgeting is less significant than determining the strategies to follow. This is untrue, and it is expected by all prudent businesses to design and follow a strategic budget for their digital marketing campaigns.
It is not a very hard matter as you will find a lot of information regarding digital marketing budgets that you may require to design one. Some articles and papers will discuss the percentage of the overall marketing budget you should devote to digital. However, opinions may vary as you might expect, but as most of the data published is for consumer-oriented businesses, it will help you design a framework to determine your optimal spend on a digital B2B marketing campaign.
Look at the big picture.
Taking a look at the big picture, you will come to know about the clear trend in digital marketing and the growth in the percentage of overall digital marketing spend. According to the report of eMarketer, it is predicted that digital ad spends will account for nearly 45% of total media ad spend by 2020.
Companies of today continue to inflate their digital marketing programs and spending, and there are several specific areas where businesses plan to increase their investment. Primarily the areas are:
- Search advertising
- Mobile and
- Social marketing.
Among these toppers in the list for growth initiatives, mobile is accelerating rapidly, so much so that it is very difficult to overstate how much it will continue to grow. However, it will not be exaggerating if it is said that it will eventually dominate all others to become the primary digital interface to use.
- According to the most recent CMO Survey, it is predicted that the marketing spends on mobile is sure to increase by 118% in the next three years, judging by the response to usage trends.
- Based on this feedback, the B2B owners and marketers feel that these mobile numbers are actually very conservative. They understand the role mobile presently plays and the change in trends in it.
Mobile may be the biggest source of website traffic. If for you it is not today, then it surely will be tomorrow provided that you go for better and more responsive web design in Portugal as this is the fastest-growing segment on which you should focus for the bigger and better future of your business.
The guidelines to follow
There are specific guidelines for B2B digital marketing budgets to follow to not spend it all over the map. It should ideally vary depending on your business type, whether the business is service focused or product-focused.
- On average, and according to the CMO Survey, you should spend at the most 6 to 9% of your company’s revenues on marketing. If your business is service-oriented, it will be at the lower end, and for any product-oriented business, it is usually at the higher end of the scale.
- However, there is no single figure or answer to it to ascertain a definite value of digital marketing budget allocations. It all depends on your business, market state, nature, size of your business and demands, and other socioeconomic factors.
To determine the quantum of your digital marketing budget, first, you will need to find the answer to a very critical question, and that is: what role digital should play in your marketing campaign. The answer to this will vary according to the type of product you sell and the complex nature of the sales cycle.
Complex sales cycle
To determine the complex sales cycle, you will have to work with different SaaS or Software As A Service firms for different benefits. These companies usually have a long and complex sales cycle, which is typically a high-consideration purchase partnership and a high-cost investment.
However, if you work with them, you will know about different spending models that you may choose from depending on the situation and determine which model will work at its best.
Even a few companies spend even 100% of their marketing budget on digital, while others may spend only 15% of it. However, according to experts, the most reasonable average is 25 to 50% of the total marketing investment to be spent on digital.
If you are B2B e-commerce and have a simpler and more standardized product that a user can purchase online, the digital is likely to play a larger role in the overall marketing mix, putting the digital marketing budget within the 35 to 75% range.
The common challenges
There are a few common challenges to overcome when determining your digital marketing spend as a B2B company.
The biggest issue seems to be in achieving ROI due to the insufficient resources available. Typically, this challenge stems from the two specific challenges, such as:
- Your company may not dedicate enough staff for digital marketing, and as a result, the timelines are hard to meet. Moreover, it also results in the recommendations that are not being implemented properly as well as in a timely fashion or,
- Your company does not allocate enough money for digital marketing, which results in the inability to collect and analyze the data that is insufficient in amount. As a result, it hinders the analyzing process and prevents you from drawing a meaningful conclusion about the results of your digital marketing and the ROI.
Therefore, to make the best use of digital marketing, there is no doubt that you will have to shift and allocate sufficient funds from traditional channels into digital.