A question we are asked often is ‘How much do I need to spend on Digital Marketing?’. It sounds like a simple question, but I’m sorry to say it doesn’t have a simple answer. We all know that this figure should be calculated based on your company type, your competition, how aggressive you want to be, what budget is available etc. It almost goes without saying that the budget planning and the process of arriving at that figure should be well thought through in advance of any activity. In our experience however, it doesn’t happen this way for a lot of companies.

Few will admit it, but the decision on budget can be reactive and based on a client’s personal feelings about Marketing and what he/she feels they are willing to spend. Sometimes the number is based solely on what was spent last year with no examination of what value was achieved or if that figure can be afforded again.

With 14 years’ experience in Digital Marketing, together with our involvement with small and medium size businesses, we have put together some guidance that might be helpful in deciding your Digital Marketing budget; a realistic budget that is best for you and your business.

Important questions we ask at the outset

  1. What are your business goals?
  2. What is your vision for the next 12, 18 and 24 months in regards to your business and digital marketing?
  3. What does success look like for you, your team, and your business at each of these milestones?

Having a better understanding of these questions at the planning stage will be helpful in giving you a top level view and a good feel for what you want to achieve. It will allow you to develop a starting budget range that is right for you and your business.

Marketing is an investment in the growth of your business.

History Matters

Use Google Analytics and historical information to help guide how much money you need to spend to reach your business goals and how to optimise your efforts to get the most out of your marketing budget.

Consider what spend was necessary to acquire a new customer in the past? See what has worked well in the past? What hasn’t? How well are you converting website visitors to customers? Does this need to be addressed? Is it time to consider a website upgrade or a process improvement to address an issue you know is having a negative effect on your sales?  If so, this should be factored into your marketing activities or at the very least scheduled for a future time.

Access to this information is very valuable and can help set a path for the future, giving confidence that the budget is thought through and considered; not just a random number plucked from the sky!

Consider the Cost of Advertising

Ask yourself how much will it realistically cost to gain a new customer? This can give you an idea of how many customers you can expect based on your planned spend. Most businesses won’t be able to answer this question accurately without having experience with online advertising already.

Another option is to use the average cost per click (CPC) on Google search ads as a guide for the cost of advertising. You can do this by using Google’s Keyword Planner to research the average CPC for your most targeted search keywords that are most likely to convert.

For example, if you own a butcher shop, your most targeted keywords might include “order meat online” or “butchers near me.”

A low CPC on these very targeted keywords means you can get more out of a small budget. However, a high CPC is a sign that you’ll need to spend more to acquire a new customer.

digital marketing cork

Determine what can you Afford?

What can you realistically afford to spend?  As a general rule, the marketing books would say Irish companies should spend between 7-10% of their revenue on marketing (with US companies spending 10%+).  We have a different view on this and advise our clients to be realistic.  Don’t spend what you don’t have, spend only what can you afford.  Start off with a budget that you’re comfortable with and can commit to in the long-run. You can increase the spend based on activity/success and build over time.

Tips to set that Budget

  1. Decide how much will it cost you to acquire a customer? Establish a cost per acquisition (CPA) goal. Running your first campaign will quickly let you know whether achieving that goal is realistic, or whether you need to adjust. This will give you a clear picture of what kind of advertising budget you need and you can plan for future investment.
  2. Be realistic. Acknowledge the reality of your budget and set your expectations. Don’t expect huge growth if you know your spending is too low.
  3. Get creative. Sometimes novel or creative initiatives in advertising can pay off and it’s only found through testing and experimentation. Be prepared to do this and learn. You won’t find it though if you’re not spending any money.
  4. Once you begin to see ROI, you can be more confident to scale up your spending. See if the same applies as you spend more.


ePresence Digital Marketing Agency Cork & Kerry

ePresence is a Google Partner and results-driven Digital Marketing Agency; with local offices in Cork and Tralee, Co Kerry. We work with you to understand your business needs and to develop solutions that will deliver results. Let us help you plan your marketing budget to achieve your business goals.  Take the first step and get in touch with us.