Whether you’re an entrepreneur or a massive national brand, it is crucial to be aware of how you are investing your marketing dollars.
In a perfect world, we’d all have extra cash to allocate across a mix of traditional and digital mediums to reach the highest number of potential customers. Although, the reality is it’s super unrealistic for most of us. That’s why we believe that taking a digital-first approach can help you start reaching more customers today in the most efficient and affordable way.
Here at Blue Moose, we averaged a little less than $1500/month on digital marketing and essentially zero on traditional advertising in our first three years of business. In that time, we doubled our revenue and grew our team to a point where today we’re able to invest more into our overall marketing. This is all possible because of the time and effort we invested early on into our digital marketing.
A common question we get asked is “how much should I be spending on marketing?”. The truth is that there’s no one right answer, but a good place to start is to look at investing a certain percentage of revenue. According to BDC, Business to Business (B2B) companies in Canada spend between 2 and 5% of their revenue on marketing, and Business to Consumer (B2C) companies spend between 5 and 10%. So, let’s assume for a second you work for a B2C company doing $300,000 in annual revenue. That’s a ballpark marketing investment of around $1500/month. Frankly, that’s not enough to gain any traction with traditional media… but don’t shoot the messenger. That being said, $1500 is a fine starting point for making an impact through digital.
To illustrate the difference, in Saskatoon $1500 buys you one billboard spot in an okay location for about a month. Now keep in mind you do not get to choose the audience that sees your board (besides getting to choose the neighbourhood), there’s no variation in creative, and it’s nearly impossible to measure the impact.
On the other hand, what if we took that $1500 a month, spent $250 boosting our organic content, put $500 towards a month-long Facebook and Instagram campaign, and allocated the last $750 toward Google Search Ads. With this route, we can almost exactly calculate our expected ROI and know our investment went into communicating directly to a specific audience… not just whoever drove by that morning and may have looked up. But that’s just the start of it. This route allows us to test variations in imagery, copy, targeting, and so much more without spending a penny more. This way we will know what’s actually connecting and resonating with our audience.
So what kind of actual results could we reasonably achieve with this spend? The chart below shows a rough estimate of our expected results based on data from our historical performance, and platform specific estimates.
As you can see above, there is huge impact potential with $1500/month, and it’s impactful in a variety of ways that isn’t just limited to reach. Furthermore, now we can make meaningful adjustments to our budget, creative, and targeting, to improve our ROI. Then, down the line when we’ve earned that sweet sweet cash… we can take what we’ve learned about our audience, and apply it to traditional forms of marketing alongside our digital in a more effective and efficient way.
As long as you’re always trying to connect with your audience in a meaningful way and are willing to try out some new tools, digital marketing proves to be consistently less expensive, more effective, offers more data, and gives you far more flexibility than almost every form of traditional advertising.
Did you enjoy this article? We love empowering small businesses to tackle digital marketing and social media on their own.
Learn about our Digital Marketing Certification here