There’s no getting around it, in today’s world, building your online presence so customers can find you is essential. But you might be thinking, ‘what is the real cost of digital marketing for small businesses?’ The answer might not be something you want to hear.
It depends.
It depends on what you want to achieve, the location of your business, the strategies you use and how competitive your market is.
Digital marketing can cost anywhere between hundreds or thousands of pounds per month but, of course, this will depend on what you actually have to spend. Just remember that large businesses have huge amounts of money to throw at digital marketing, so they’re likely to see much faster results. One of the biggest bonuses of digital marketing is that it’s often easier to track the results than with traditional marketing so it’s easier to see whether it’s effective or not.
In this blog, we’ll have a close look at the factors that can impact the cost of digital marketing and what you should realistically expect as a small business owner looking to get started.
How much are businesses spending on digital marketing in the UK?
When you’re a small business with a limited budget, it can be difficult to know where to spend your money when it comes to digital marketing. Research shows that 38% of small businesses spend less than £1,000 per year on their marketing. Another 38% spend £1,000-£5,000 per year.
Getting the best results from your digital marketing budget doesn’t mean you have to spend tens of thousands of pounds to compete with the big players. You just need to right strategy in place.
It doesn’t really matter how much you’re spending on digital marketing. It’s what you do with the budget you have and how effectively you can use it.
Learn more about measuring the ROI of your digital marketing strategy in our blog.
As a small business owner, we know how critical the cost of your digital marketing is. It might be tempting to choose the cheapest freelancer who promises to get you to the top of Google within one month but, realistically, not only is this not possible, you’ll probably end up wasting your money.
An effective and well-managed digital marketing strategy can:
- Drive website traffic
- Generate leads
- Build brand awareness
- Improve customer engagement
- Drive sales
What can impact the cost of digital marketing for your small business?
Let’s have a closer look at the key factors that can affect the cost of digital marketing for your business.
1. What can you afford?
One of the most important factors to consider when it comes to launching a digital marketing strategy is how much you can actually afford. We’re not going to tell you to spend £1,000 a month if you don’t have it!
And no one else should either!
A rough guide is around 2-5% of your revenue should be spent on marketing. But, if you want to be more aggressive or you want to see faster results, you’re going to want to spend more.
Always work to the budget you can afford. It might not be much but, if you can use it effectively, it should drive results for you. You’ll just need to be patient if you’re working on a shoestring budget! Digital marketing takes time and energy to work so stick with it and be consistent.
Plus, if you get the right strategy in place, spending more should deliver more results. A good digital marketing partner will tell you where your budget is best spent and what you can expect if you up your budget in certain areas.
2. The market you’re in, and your audience
The market or industry you’re in will have a huge impact on how much you’ll need to spend to drive results and on your conversion rates.
If you’re running pay-per-click ads (PPC) in a highly competitive market, it’s going to cost you a lot more to compete with the bigger players. This is the same across social media and even SEO (seqarch engine optimisation). It’s a lot harder to reach the top spots in the search results when competition is high than it is when there is a lot less competition.
Different industries have different levels of competition and demand for their products and services which can have an impact on the amount you’ll need to spend on marketing.
Businesses in highly competitive industries will need to spend more to stand out and attract the right customers. However, if you have less competition, you’ve got a bit more space to play with. You’ll always need to do a bit of research to make informed decisions about your budget.
Knowing who you’re targeting will ensure you’re spending your budget in the right way and getting the most from it.
3. Your location
Again, this is similar to your market. If you’re in a big city and trying to compete with a number of other businesses, it’s going to be harder to get your business out there, and it’s going to cost you more.
On the other hand, if you’re somewhere smaller with less competition, it’s going to be a lot easier to break through the noise and ensure that you’re driving sales for your business.
4. Your goals
The budget you need to put behind your digital marketing strategy depends on your business goals and what you’re looking to achieve. If you want your digital marketing to drive a certain number of sales or enquiries per month, look at what budget you’re going to need to achieve it. Not all businesses are the same, so your goals will have an impact on your spend.
5. Whether you choose to take it on yourself or outsource
There’s no doubt that outsourcing your digital marketing to an agency or a freelancer will cost more than doing it yourself. When you use someone else, you’ll expect to pay for the cost of the third party to develop and manage your strategy for you as well as the ad spend if you choose to run Google ads or social media ads.
When you choose to do digital marketing yourself, you’ve only got the cost of the paid ads. However, you’ve also got to make sure you’re giving your strategy the care and attention it needs.
Paying a freelancer or digital marketing agency for their digital marketing services it may be more expensive, but it will pay dividends over the long term. Having someone who knows digital marketing inside out and who has dedicated time to managing your strategy will help you to drive the best results for your spend.
A freelancer or agency may provide an hourly rate and they will tell you how much time they will dedicate within a month to your marketing and what you can expect to see within that time. Other businesses will charge a flat retainer fee but they should clearly outline the activity you can expect within that retainer so that you know exactly what should be happening on a weekly or monthly basis.
6. Your timescales
If you need (or want) to drive results quickly for your business, you might need to reset your expectations if you think you can do it on a small budget.
There’s no getting around the fact that if you want fast and huge results from digital marketing, you’re going to need to spend more.
Digital marketing will and can be effective on a small budget, but you need to have patience. Start small, see what works well for your business and what doesn’t and build from there. If you try and do too many things at once, you’re going to dilute your budget, and you’ll dilute the results too. Throwing your budget into as many activities as you can won’t mean you’re going to drive great results - it could mean you’re wasting your budget completely.
What do we recommend?
Getting the right digital marketing agency and the right package for your business is essential to success. Find an agency that’s willing to work with you on your goals and someone who can offer you a small business package that’s not going to break the bank but will still drive results for your business.
You should be able to communicate with your agency to find out what’s working and what isn’t. Once you know that your digital marketing is effective, you can start to invest more in the activities that are working.
We offer two digital marketing packages. They’re based on results we’ve driven for small businesses like yours in the past. We’ve found a formula that works and we want as many small businesses to dip their toes into digital marketing as possible.
These packages will help you to get your strategy off the ground and start driving results for your business.
If you’d like a digital marketing package that works for you, take a look at our exclusive small business digital marketing packages.
