How To Allocate Budget for Digital Marketing?

The perfect balanced marketing budget helps you scale your ROI (Return on Investment) and fit your marketing strategy to your company’s possibilities. The whole process of marketing budget allocation is straightforward but requires significant effort. To achieve satisfaction revenue online, read my article and learn how to allocate budget for digital marketing!

Allocating your digital marketing budget in 5 steps

5 simple steps to allocate a digital marketing budget:

STEP #1: Consider marketing practices

Initially, you should consider what marketing practices you want to implement. It may be, e.g., SEO (Search Engine Optimization), Google Ads campaigns, social media marketing, influencer marketing, outbound marketing techniques, e-mail marketing, or PR.

It depends on your marketing plan. I recommend mixing SEO, content marketing, and social media marketing. E-commerce owners can also try influencer marketing.

STEP #2: Define your maximum budget & leading service

Entrepreneurs have specific expense limits, but the minimum marketing budget is $1,000 monthly. You should spend $2,000 to $4,500 monthly if you think seriously about growing and scaling your business.

Then, your budget template can look as follows:

• $2,500 for SEO,
• $1,000 for Google Ads campaigns,
• $1,000 for paid social media campaigns like Facebook Ads.

If you’re running a local business, like an ink or beauty studio, you can spend 30–40% less than e-commerce & big service site owners. Why? Effective local SEO costs $1,000 to $1,500 if you work in a low-competition niche in a small state (e.g., Juneau, Alaska).

Photo 1. The first five search results for the local keyword “Tattoo Shops in Juneau, Alaska”. Source: www.google.com

As you can see, the first five search results are based on Facebook, Yelp, Instagram, and Reddit. You’ll beat SERP’s competitors if you create a website that fits SXO (Search Experience Optimization) standards and write high-quality content with minor link-building.

STEP #3: Decide about additional digital marketing channels

Online marketing can be based on SEO as a leading service. You can use SEM advertising (Google Ads) or paid social media marketing campaigns to rocket your marketing efforts.

When do I recommend using Google Ads? Especially when you’re just starting SEO strategy and waiting for the first TOP 10 positions in Google. After you achieve the TOP 10 in SEO, stop the Google Ads campaign for a given keyword and start for other phrases that didn’t reach the TOP 10.

Use the free Google Keyword Planner to choose the right keywords for Google Ads campaigns or SEO purposes.

Photo 2. Keyword research in Google Keyword Planner. Source: ads.google.com

STEP #4: Choose primary marketing goals

While creating a digital marketing budget, you should consider your primary marketing goals. What do I mean? If you care about maximizing the conversion rate in the next 3–4 months, I recommend spending 70–80% of the marketing budget on Google Ads & paid social media campaigns, e.g., Facebook Ads, Twitter Ads, or TikTok Ads. 

To scale your business in the long run, without worrying about the effects now, allocate most of the budget to SEO.

Also, remember about other digital marketing strategies, like e-mail and influencer marketing. It usually requires an additional budget, but it’s worth getting customers in the short term (2-3 months). 

STEP #5 Planning your digital marketing budget for 6–12 months

In this step, calculate all and ensure you can do so despite the company’s worst performance. You must be consistent; even if something doesn’t work now, you shouldn’t stop investing.

It’s crucial when you decide to implement an SEO strategy. Every break in content creation or link building negatively affects your site’s SEO performance and crawlers’ point of view.

The more often you interrupt your marketing activities, the longer you wait for results.

Digital marketing budget allocation – summary

Finally, I recommend allocating 60–70% to your leading marketing service (e.g., SEO) and the rest of your money spent on less important but necessary services, like Google Ads, social media marketing, and influencer marketing.

Remember that every decision you make should be based mainly on KPIs, a.o.:

• Amount of organic traffic,
• Click-through rate (CTR),
• Keywords positions,
• Level of conversions from organic traffic,
• etc.

One of the best SEO tools to measure your marketing activities is Ahrefs.

Photo 3. Ahrefs’ organic traffic measure. Source: app.ahrefs.com.

How To Allocate Budget for Digital Marketing? – FAQ