This is an important question, and one that can vary depending on the size and age of your business, the industry that you’re in, amongst other factors.

The question you should ask first however, is how much do you want to succeed?

Obviously, spending 80% of your gross annual income isn’t going to be sustainable, and likely won’t guarantee you a big enough return to justify such a spend.

It’s more about smart marketing and investing in the proven methods.

The general rule of thumb is that you should be spending approximately 5%.

This should incorporate your SEO, your Google Adwords, Social Media marketing, sponsorships and other forms of marketing.


The U.S Small Business Administration claim that spending 7 to 8% of your gross revenue, if your earning less than $5 mil in a year, and your after-expenses profit margin is in the 10-12% region.

Again, this is a rule of thumb! Some people may wish to go higher, whilst others might wish to go lower.

For brand-new business, they say that you should be spending 12-20% of gross revenue.

Whereas, the more established businesses should keep it between 6 & 12%.

So, you need to figure out where exactly you fit into these brackets.

Are you long established?

How much gross revenue do you have available to spend after your expenses have been taken into consideration?

Because you don’t want to go too heavy on your investment and suffer.

Then again, if you’re not putting in enough, it could be money wasted.


Build a strong foundation to grow with

Your initial investment in your marketing is the important part.

For example, sinking thousands upon thousands into your marketing is all well and good, if you lack the infrastructure to either convert traffic into customers or deal with the expected growth.

Therefore, you need to invest in laying the foundations before strategizing your marketing campaign and moving forward with it.

Something as simple as hiring a digital marketing agency to assist you with your conversion optimisation, can work wonders.

It’s about creating a website which is clear and concise, easy to navigate and is written in such a way that encourages sales.

This means, in-depth product or service descriptions, with a clear “add to cart” option.

If you were to skip this stage and dive straight into a full-blown marketing campaign, you’d certainly get people to your website, but how many of them will drop off and take their business elsewhere?

What is to be included in your marketing foundation?

  • Brand
  • Marketing strategy
  • Website design & development

Again, without putting any time or effort into those 3 key areas, your marketing efforts will be ineffective, and ultimately a waste of time.

Which is likely the reason why there are many companies out there who shy away from most forms of marketing, dubbing them “pointless,” or “a scam.”

You have to be careful of adopting such a dangerous line of thinking.

The fact is, marketing works well, when done correctly.

It requires time, patience and creativity.

Use a reliable digital marketing agency that can assist you with strategizing your campaign straight away.

What do other companies spend?

Another very important question, and one that can be difficult to identify.

As a rule of thumb, you can guess that most established companies will be spending between 5 & 10% of their gross annual income.

Then again, how can you identify how much they’re turning over?

I guess you could argue that, you shouldn’t worry too much about what other companies are spending.

Instead, you should focus wholeheartedly on what you’re doing.

That being said, you can look at how they’re ranking for their target keywords, particularly if they’re your competitors.

With a reputable digital marketing agency, there are methods that they can use to get a good look at what your competitors are working on in terms of SEO.

This kind of information will be invaluable for planning your own marketing campaign.

That way, you can take steps towards overtaking them in the race and investing a realistic budget in order to get you where you need to be.

You should assume that your competitors are spending somewhere in the average region on their marketing.

Then once you’ve identified the various forms of marketing that they’re working on, it should be simple enough to break down what they’re investing in each.

In any case, you must focus more on what you need to be doing!

Focus on building a strong foundation, set some realistic targets and then get to work!

Set measurable goals

When allocating your budget, first you need to set some realistic, measurable goals.

  • Increase overall website traffic (which can be monitored and recorded using analytics)
  • Increase the amounted of targeted leads reaching your website
  • Grow a new business, or division within your business
  • Push a certain aspect of your business & website and dominate sales

Refine the foundation

It’s all well and good spending time on building a strong foundation, but you have to double check, refine and compare.

  • Is your brand up-to-date and clearly representing your vision, message and overall personality?
  • Is your brand consistent across all media, including social pages etc?
  • What is your website like compared to the competition? Has it been well-opsimised by an experience marketing consultant?
  • What could be hindering your visitors, from being “clicks to customers?”
  • Have you put the correct tools in place to help you measure your success?
  • Do you have a foundation in place to help you cope with the new workload should your marketing campaign kick off?
  • Is your business development strategy in line with your marketing? How solid are your strategies?

Double check, refine and compare.

Then do it again!

But the most important thing of all, is not to remain rigid in your approach.

Be open to new ideas and try to innovate on the go!

Challenge your marketing consultant to share new ideas with you.

Question their methods and try to fully understand the purpose of each medium.

There’s a lot to learn, but if you’re open to it, you can gain an awful lot of valuable information.


Don’t be tight with your budget

There is such a thing as spending too much, however, the more common of the two is those who spend far too little.

You can’t be tight with your budget!

If you want to experience continued success, and to become the dominant figure in your industry, then you need to dip into your profit and start investing in your marketing wisely.

Consider this quote by Henry Ford: “A man who stops advertising to save money is like a man who stops a clock to save time.” You’ve got to get in the race and keep running! That is how you stay on top.

Feeling a little overwhelmed?

Don’t worry, that’s why we’re here.

If you are keen to explore some digital marketing further, but require a little guidance, then please feel free to contact us today.

One of our friendly representatives will gladly sit down with you, and identify the best approach when it comes to taking your business to the next level and securing your spot as a leading contender above your competitors.