Are you running on a tight online marketing budget? Know how much it actually costs.

Author : EvenDigit

Ed Blog1 05 08 22
Digital marketing has become the blood of every business. Every company is implementing digital marketing processes to generate high revenue.

An organization’s most significant challenge is efficiently planning the digital marketing budget.

So, let’s understand more about the marketing expenses and how you can allocate the digital media budget for your business.

What Are Marketing Expenses?

The cost spent in promoting and advertising the products and services of a business is referred to as marketing expenses.

In the era of digital growth, the number of marketing platforms is increasing rapidly. Businesses are trying to reach every customer through all of those platforms.

Managing marketing costs has become the norm for every business. To understand better, let’s look at where most companies are putting their marketing efforts.

List of Typical Business Marketing Costs

There are plenty of types of marketing channels that require different approaches. To satisfy every aspect of digital marketing, companies invest in a lot of elements, some of the universal ones mentioned below:

  • Website development and maintenance costs
  • Search engine optimization and marketing costs
  • Social media optimization and marketing costs
  • Automation tools costs
  • Designing and development costs
  • Advertising campaigns costs
  • Image and video production costs
  • Hosting and promoting events costs
  • Content marketing costs
  • PR campaigns costs

The list will depend on a business’s industry, goals, and strategies. Digital marketing is a diverse option for every business.

To leverage these many options, an organization needs to allocate the overall marketing budget for smooth operations.

Digital Marketing Budget Breakdown

Businesses generally spend 10% – 20% of the overall revenue on marketing. If you are struggling to break down your marketing budget, then continuing with the 70-20-10 principle will be a good start.

According to this rule,
You should spend 70% of your budget on ongoing successful strategies.
You should spend 20% of your budget on the new strategies.
You should spend 10% of your budget on the experimental strategies.

For example, If your marketing budget is $10,000, then your budget breakdown should look like this:
$7,000 for content creation, SEO, search engine, and social media campaigns.
$2,000 for marketing new product launches, upgrading tools, and other services.
$1,000 for A/B testing,

The central curiosity of business owners is mainly in the other compliances that come with the marketing services. Let’s understand the tax principles in the next section.

Marketing and Tax

The significant exemption for the businesses is that marketing expenses are tax deductible. The marketing costs come under the “advertising expense,” tax deductible.

Businesses can use tax-deductible costs to reduce the taxable revenue they accrue yearly. That means your company will pay less tax.

The following are some of the most typical deductible marketing expenses:

  • Salaries for marketing executives and dealers
  • Public relations associated costs
  • Direct emailing services and other promotional contracts
  • Sponsorship costs
  • Business cards related costs

How Much Should a Company Spend on marketing?

How much we should spend is the fundamental thought that strikes the minds of every company’s operations chief.

And it is apparent that the distribution of marketing expenditures does not provide the desired outcomes without a thorough understanding and accurate estimate in mind.

According to numerous studies and audits, digital marketing has ensured success in almost every field.

The concept is to allocate 70% of the total marketing budget on internet marketing and advertising.

Let us explore some of the well-known digital platforms and channels and how much you actually must allocate for them.

How Should Companies Spend and Allocate Digital Marketing Budget?

How much we should spend is the fundamental thought that strikes the minds of every company’s operations chiefs.

And the distribution of marketing expenditures does not provide the desired outcomes without a thorough understanding and accurate estimate.

According to numerous studies and audits, digital marketing has ensured success in almost every field.

The concept is to allocate 70% of the total marketing budget to internet marketing and advertising.

Let us explore some well-known digital platforms and channels and how much you must allocate for them.

How To Allocate Facebook Advertising Budget and What’s The Cost?

When allocating the budget for online marketing, a good percentage of social media marketing costs should be spent on Facebook advertising.

In 2022, Facebook recorded 2.85 billion monthly active users worldwide. It would be best if you consistently prioritize Facebook in the social media marketing budget.

For distributing the Facebook ads budget, you must follow the 20-60-20 rule.
According to this principle, 20% of your FB ad costs should be spent on audience building, 60% on offer promotions, and 20% on retargeting.

Various factors impact Facebook advertising costs; some of them are as follows:

  • Audience and Demographics
  • Advertising Budget
  • Advertising Bid & TimePeriod
  • Advertising Objective and Goal
  • Placements and Ad Type
  • Industry and Season

Here are the average Facebook advertising costs in 2022:

AVERAGE FACEBOOK ADVERTISING COSTBIDDING MODEL
$0.97CPC
$7.19CPM
$1.07CPL
$5.47CPA

Source: How Much Does Facebook Advertising Cost in 2022?

Cost comparison between Instagram and Facebook Advertising:


Social PlatformCPMCPC
Instagram$0.2-$2$6.7
Facebook$0.97$7.19

Although both are the most used social media platforms, they have different audiences. On Facebook, you can target every age group, whereas, on Instagram, the most active and engaging audiences are between the 22-29 age group.

Although both are the most used social media platforms, they have different audiences. On Facebook, you can target every age group, whereas, on Instagram, the most active and engaging audience is between the 22-29.

How Much Does Google Ads Cost?

Google advertising is the main priority of every company. The more effective Google Ads are, the more business the company will generate.

Google Ad campaign costs depend on various factors, including:

  • Industry and Niche Audience
  • Quality Score
  • Campaign Setting (Budget, keywords, bid)
  • Ad Rank

Your ad performance depends on Google ads budget, campaign settings, the performance of the ad, and the ad rank.

However, there is no universally fixed average Google ad campaign cost. In general, businesses can expect the following costs from Google Ads:

FactorsAverage Costs
Ad Spendmin approx. $10,000
CPC (Search Network)min approx. $2 / click
CPC (Display Network)$1 or less / click
Ads Management12% – 30% of monthly ad spend
PPC Tools$15 – $800 / month

Source: How Much Does Google Ads Cost in 2022?

However, running ads on Google is complex and requires professional expertise in overall digital media marketing. Online marketing companies will help in maximizing the ROI with the help of PPC and other practices.

How Much Does an SEO Campaign Cost?

Organically approach (SEO) also plays a significant role in bringing the companies’ long-term business. When it comes to SEO marketing costs, it varies depending on the services you opt for.

When allocating an SEO budget, an organization must look at the goals. The SEO rate may vary from $500/ month to $1 million/month, depending on the business sizes and goals.

Although many people get confused by the term SEO advertising cost, it’s nothing new. SEO advertising is a colloquial term used instead of PPC campaigns and advertising.

SEO is a vital element in digital marketing and requires detailed knowledge to perform. An SEO campaign cost may vary depending on various factors, including:

  • Industry
  • Business Size
  • Strategies and Approaches
  • On-Page Implementations (Content & Technical)
  • Off Page Processes (Backlinks and Recommendations)
  • Business Goal (awareness, sales, engagement, etc.)

How Much Does Email Marketing Cost?

Email marketing is the most cost-effective and profitable method. ROI from email marketing can be up to 4400% if managed efficiently.

If a company does and manages email marketing on its own, the average cost can be between $9 and $1,000 per month.

$300-$500 per month can be expected if it is managed by an agency or outsourced online marketing business. The agency will be more beneficial in increasing the ROI and overall revenue for the company.

Allocating 16% of the marketing budget to Email marketing will be optimal. The factors that impact the costs of email marketing are:

  • The quality of data (list of current emails)
  • The complexity of mail (content and design)
  • The email platforms you use for marketing

How Much To Allocate For Video Advertising Budget?

According to 81% of marketers, video advertising helps directly increase sales.

A company must allocate 40%-60% of its internet marketing budget to video advertising.

Source: How Brands are Investing in Video Marketing On a Budget

Allocating a significant portion to video advertising is essential as video productions and promotions require a reasonable budget. Platforms also play an important role in video advertising.

One of the fastest ways to generate business online is by implementing social media video marketing. The video watch time on social platforms is rapidly increasing.

Video advertising budget depends on various factors, including:

  • Video Goals (awareness, education, sales, etc.)
  • Video Content
  • Video Production
  • Video Styles
  • Platforms for promotions
  • Target audience & Demographics

Picking the perfect social media platform is the key. Every platform provides different video advertising costs. Average costs on the Youtube ads may vary from $0.010 to $0.030.

Source: How Much do YouTube Ads Cost?

30-second video production for advertising may cost between $100 – $1,000. It is ideal for collaborating with a video marketing agency to leverage digital video advertising.

5 Pro Tips: How to Efficiently Manage Marketing Expenses

Knowing the estimate for the marketing services is tremendous but efficiently managing the expenses also requires proficient skills. Here we are sharing five tips that will help to manage your marketing budget better:

  1. Determine the overall marketing budget for your organization.
  2. Make a list of the digital platforms you will use.
  3. Estimate the potential costs and ROI for each platform.
  4. Evaluate current strategies (what’s working or what’s not?).
  5. Be prepared for the hidden costs.

Conclusion: Efficiently Digital Marketing Budget Leads to Higher ROI for Your Business

Knowing the potential costs of a digital platform, you can now efficiently allocate your digital marketing budget accordingly.

An efficiently allocated budget will lead to high revenue generation and require efficient marketing services. It is always ideal for collaborating with an experienced digital marketing company to increase business ROI.

EvenDigit is one of the top digital marketing companies and a Google Premier Partner. We can easily help you promote your business online with relevant, cost-effective strategies.

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