What Is A Good Digital Marketing Budget For Your Company in 2021? (Post COVID-19)

What Is A Good Digital Marketing Budget For Your Company in 2021? (Post COVID-19)

What Is A Good Digital Marketing Budget For Your Company in 2021? (Post COVID-19)

Good Solutions & Offerings Still Needs To Be Marketed

Even in post COVID-19 times, a good digital marketing budget is a must.

One of the things that business leaders need to understand is the importance of digital marketing in the new normal. While there are some leaders who have a hard time figuring this out, we just want you to remember about Apple from the 90s. Not the Apple today but from back then.

I may be dating myself – but there was a time when Apple was not the giant it was and Microsoft and IBM dominated the world of Tech.

So what happened? How did Apple come to dominate and the likes of Microsoft, IBM, and other dinosaurs today come to take a back-seat in market-caps? (don’t get me wrong, IBM and Microsoft are still innovating, but they have not been able to get their leadership position in 2021).

When Steve Jobs took the reigns, he knew that the company needed a lot more than good products. They needed a well-thought marketing strategy that allowed people to get to know their products. So, with this in mind, he set up his action plan and the reality is that he did it. No one can believe that when Jobs took over Apple at that time, the company was near bankruptcy.

While not all companies can be Apple and not all business leaders are Steve Jobs, the truth is that we can all learn from this real example. A good digital marketing plan can help your company grow.

Digital Will Play A Bigger Role Post COVID-19

With most western nations expected to roll-out the vaccines in 2021, we expect digital marketing to play a bigger role than pre-COVID-19 levels.

According to the latest research in 2020 of surveys done with Chief Marketing Officers – there “Digital is King” and is expected to account for 80% of the total Budget.

Source: Gartner.com – CMO Spend Infographic 2020-2021

Additionally, in the same research paper, the analysis revealed that CMOs do see tech as the path to more customer intimacy and recovery. In 2021, with the vaccines rolling out and traditional marketing activities and in-person eventing coming back into play, digital will account for approx. 26% of the total marketing budget spend across many industries in big business.

Different Industries Have Different Budgets

While having some amounts in mind is a good thing, you can’t forget that the money or percentage that you decide to invest in digital marketing ultimately depends on your industry. Education tends to be the industry that has a high budget for marketing, followed by consumer services, and transportation, and the industries that tend to have smaller marketing budgets are usually a part of the mining/construction and energy industries.

Different Industries Have Different Levels Of Adaption To Digital:

Digital Marketing Budget Impact - changes in behaviour. CMO Survey graphic.

Source: The CMO Survey. Conducted by Deloitte, AMA & Fuqua School of Business. Results Published June 2020.

A great summary attached in the link showcases that there are opportunities in Manufacturing & Pharma industries not adapting as fast in providing a better digital experience in a post-pandemic world.

I suppose that is to be expected, given many manufacturing businesses that were hard hit because of the pandemic was likely saving the spend in marketing given the loss in revenue. Others that may have seen the increase in revenue because of the pandemic (think PPE suppliers) were so intent and likely focused on fulfilling demand, that digital spending were likely not the priority in this interim.

However, digital experiences expected to return in 2021 as that is the sentiment across most industry market leaders as per below:

Source: The CMO Survey. Conducted by Deloitte, AMA & Fuqua School of Business. Results Published June 2020. Pg 16.

As the above chart shows, a bulk of marketing leaders expect the digital to play pre-pandemic roles in generating revenue by July 2021 (given this survey was conducted in June 2020 in the middle of the pandemic). This is in line with expectations as western markets have the vaccines being rolled out and will likely be the case as the world gains immunity and things come back to normal.

Finding The Right Number

So, what percentage should you devote to marketing? What should be taken into consideration?

The truth is that there isn’t a right or wrong answer to this question. Nevertheless, and even though you may have the biggest budget in the world, you need to know how to apply it.

If you decide to pose this question to different marketers, most of them will say that it depends on your industry. And they are right. However, if you push them to give a more detailed answer to this question, most of them will say that if they need to say a number they would say 10%.

In our opinion, there isn’t a magic number like 10% or 15% of your revenues. The truth is that the budget that you dedicate exclusively to marketing depends on many different factors.

Even during the pandemic, when companies took a significant drop in revenues, the percentage of marketing spends increased to the highest level in the last 10 years as a percentage of total revenue. This indicates the importance of marketing spends even during the pandemic. There was a drop in marketing dollars, but the percentage increased and there was changing the mix towards more online or customer experience vs. offline marketing training initiatives within the budget from a survey done by TheCMOSurvey.org.

This is to be expected as due to this pandemic, social distancing measures and multiple lockdowns that occured, we were little cut off from delivering off line or in person marketing initiatives.

So how do we know what percetange is right for your company or brand having understood a greater shift towards digital?

The marketing budget of an established company like Apple (in its current state), for example, should be completely different than the marketing budget of a company that is still in its beginning or the growth phase.

According to a study made by Gartner Research, larger companies that have revenue over 5 $billion tend to spend, on average, 13% of their revenue on marketing.

This is also in line with the research shared by The CMO Survey where in the middle of the pandemic, marketing spends as a percentage of revenue were between 11-13%.

In what concerns to smaller companies which include the companies that have revenue between $250 and $500 Million, they tend to spend about 10% of their annual revenue, on average, on marketing.

Smaller companies will likely have a higher percentage of revenue but a lot lower dollar amount given their size. Even on a shoe-string budget, there are core digital and traditional marketing activities that budget should allocate funds to keep their pipeline humming and nurture existing and future customers.

So our recommendation at Web Worx Labs is that you should plan your budgeting cycle by having at least 10% of your revenue allocated to marketing activities to help derive future sales, grow your presence and awareness, and continue generating new business for your brand.

Conclusion

With a higher or lower budget for marketing, the most important thing to retain is that this budget is crucial as well as where you apply it.

Digital marketing has a huge influence on how people look at your company, at your products and your brand presence vs. others offering similar solutions in the markets you compete in.

Successful digital marketing campaigns are part of the mix and do bring a lot of value (sales, revenue, leads, new customers) to your company.

If your business is starting to grow, this is the perfect time to make a true investment in your brand via marketing.

Do you need help in understanding where digital marketing fits in your media marketing mix?  Call us at 1 833 WEB WORX or reach out via email info@webworxlabs.com and we would be happy to assist.

You can also schedule a free consultation if you have questions on how the digital marketing budget can impact your brand’s growth potential. Reach us via filling out this contact-form

Or if you have thoughts you want to add to this article or think we missed something in the analysis above – let us know and we would be happy to add your thoughts to the discussion!

Happy budgeting!

Related: Comprehensive Guide On Types of Advertising

Reasons for a Website in Today’s World!

Reasons for a Website in Today’s World!

Reasons for a Website in Today’s World!

 

The number of internet users is growing every day. Let’s rephrase that internet users are increasing by every second.

As of January 2018, there are over 3.8 billion internet users, according to Internetlivestats.com.

This means that approximately 40% of the world population is “connected” to the digital world.

According to a study, in 1995, only 14% of U.S citizens had access to the internet.

In North America, as of today (2018), 396 million users have internet connections (Not so far behind is the U.S. with 312 million users).

That means at least four out of every five customers are using the internet.

Not having a presence online nowadays is akin to not having a logo or a business card.

The internet has truly revolutionized the way we think, live our lives, and do business.

Here are key reasons why it is important to have a website:

First impressions

WDB Agency Blog | Is Your Website Making a Good First Impression?

 

Image Source: WBD

According to AdWeek.com, 81% of shoppers conduct research online before they make a purchase.

That statistic is very consistent with the one we shared above.

What one can derive from these two simple yet powerful statistics is that of the people who have access to the internet, use it to conduct research online before they buy.

Not too shocking, but it makes sense and has powerful implications in the world we do business today.

This means is that 4 out of 5 customers get to know about a company well before they walk through the front door.

Customers have become well informed on navigating on the internet and who they will conduct business with.

The preliminary research phase of the buying pattern has become second nature to shoppers.

Customers now online, finding solutions out there for their problems or needs and wants, review product options available, and the businesses that sell them.

They will then narrow down their search to a select few that offer what they like.

Most importantly, if they like what they see online about that business.

The first impression they get from the company, the value proposition, the branding, the logo, the state the website is in – all within seconds, and a couple of clicks.

This process has become so automatic and easy to use because of search engines and smartphone technology.

If a business does not have a presence online (i.e., no website), then that business is being neglected in terms of the consideration when being researched by a customer who is looking to shop.

These businesses are losing sales by not investing in something so basic now, yet a very important requirement and point of entry in any industry.

Not only are they losing money but credibility in the industry at the same time.

By having a website, you tell your customers you are serious about their business with you.

Another key point to emphasize is that it can be even more damaging to your business if it has a website but has a poorly functioning or designed website.

Websites that are slow to load, crash, old, too basic, or not functioning properly will give the impression that this business does not care about its customers to put up a functioning well-designed website that can influence their purchasing decision.

So, it’s safe to say that when it comes to having a website, first impressions count.

How Your Business Can Acquire More Customers With Website Marketing

 

Image Source: PDRWeb

Help people (and customers) find you easier.

Google is the biggest search engine in the world and utilized by the majority of the market (80%+ according to searchenginejournal.com).

Before they look for a product or a solution, they try to see what is out there by searching it for it on Google.

The highest-ranking sites get most of the attention of the users.

However, if the customer needs to refine and find a local business, then Google helps with that too.

Having a website that is search engine optimized puts any business at an advantage, as it allows Google (the world’s biggest search engine) to do the work for you.

Properly developed, maintained, and hosted websites will allow you to rank higher in the areas your customers are searching for.

Well designed websites work by helpings customers who are looking for you find you.

If the business website is not optimized for the search engines where people look to research online first, then that business is losing the opportunity and with it – growth.

Let the search engines do the work in bridging the customers to you by having a website that makes it easier for Google to find your business and, thereby, the customer to find you.

 

Define yourself first

Why is it so important to define yourself and be active online?

or why should you at least have a presence via a website if not active?

Because if you do not define you, others will define you, and you will lose control of your reputation in the digital world that has a direct impact on the real world.

Google search “bots” are already looking to capture any and every business out there.

Google makes money by being the best place where anyone can find what they are looking for.

This service is allowing them to become a reliable source for any kind of research.

By helping their users find what they want, it makes money by providing businesses very specialized, complex, advanced (algorithms and all) to promote and market their businesses in a subtle way.

So it is in Google’s interest to help find you and connect the consumer to you.

If you do not have a presence online, the Gods at Google will allow the customers to define you.

One bad experience like a negative post will mean severe consequences for your business in the future.

Don’t let that happen – define yourself first.  Do not let the users of search engines define you without having your say first.

Closing Thoughts

The internet is here to stay.

The number of people using the internet grows by the second.

The world has become more connected, smaller, and, most importantly, smarter because of the internet.

Most people research online before they make any kind of purchase.

Having a website has become a basic necessity for today’s world.

It allows us all to find each other faster.

It allows us to define ourselves first before others use limited information to brand our reputation in the digital world.

The first impression of a business is established online.

Way before a customer has a chance to connect with you in person or walk through the front door.

Make your first impressions count; contact us today and see what we can do to grow your business!