Marketing/Advertising Budgets must include SEO
July 7th, 2009
A few months back guest author Jen Geh talked about making sure your marketing budget included an SEO budget. It’s been discussed here, of course, but I’d like to help business owners figure out how to go about planning a marketing budget that includes SEO, which will give you the best ROI, especially in this economic climate. A somewhat humorous post by a fellow web marketer in September of 08 at least gives you an idea of where to start.
So, in planning a marketing or advertising budget, many small business owners determine the amount they spend after they have set everything else in their general budget, and then use the “surplus” for marketing and advertising. Who has surplus these days? This strategy may seem necessary, but it is undercutting what will feed and grow your business.
Considering Your Budget:
1. “How much is my main competitor spending?” You need to compete with this company, so you need to be in the same ballpark as your your competitor as a minimum.
2. What kind of growth would I like my company to experience this year?
3. What marketing strategies have worked well, and been the most cost effective?
4. Are your marketing efforts reaching your intended audience? If not what strategies can you employ to reach your target audience more effectively?
A Sample Marketing Budget Formula:
Every company is different. Every marketing budget is different, but there are some basics that we can use for the purpose of discussion.
1. Most small businesses spend anywhere from 2% to 10% of sales on marketing.
2. Medium sized businesses tend to spend 10% or more.
3. Large companies, retailers, pharmaceutical companies and the like often spend upwards of 20% of their revenue on marketing & advertising.
So, let’s assume the business owner has determined the amount they would like to spend, but needs to breakdown how the allocated funds will be spent. This formula (or something close to it) is what TKG would likely recommend to most small business owners who are looking to use their web presence to grow their business:
% of Advertising & Marketing Budgets for SEO
50% of allocated funds to ongoing web development, SEO and analytics, email campaigns
+
15% of funds to print, such as mailers, brochures, newspaper ads, and corporate identity items
+
15% of funds to radio, television spots
+
20% of funds to special events, sales, free shipping offers, etc.
=
100% of the marketing and communications budget
At a minimum, SEO should be in your budget, and if it is, you should probably double what you are spending. If it isn’t, see what’s in your traditional marketing budget that can be tweaked, or cut. We all have the things we do that make our ego feel better, but don’t generate any real results. Then allocate those funds for SEO.
If you ask me, this year, SEO is where the heart of advertising is, as you need to make each of those dollars spent work for you. SEO delivers, where traditional marketing falls a little short when money is tight, especially if you are hoping your web sales are going to keep your company afloat in a flagging economy. TKG is currently working on a template to help determine marketing and SEO costs as a useful tool for our clients. As soon as we have something workable, I’ll post it here for download.
Don’t make the mistake that so many small business have made and wait too long to cut the cord on the phone book.
