Why Plan Your Small Business Marketing Budget Per Channel?
Planning your small business marketing budget per channel helps you pinpoint your return on investment for each digital marketing channel. A detailed budget also shows you which channels are most beneficial for your small business.
REALTALK: Small businesses may see a TOTALLY DIFFERENT ROI for digital marketing tactics based on their unique audience, industry, and business model.
And there is no one-size-fits-all approach to your SMB marketing budget. So how much should you dedicate to your digital marketing strategy in 2022? Which channels are right for YOUR small business and how much should you set aside per marketing channel? We’ll help you nail down this crucial first step to grow your business with small business marketing.
Let’s get started!
What’s a Strategic Annual SMB Marketing Budget?
The U.S. Small Business Administration says that small businesses that are pulling in less than $5 million in sales annually should budget 7 to 8 percent of gross revenue for marketing and advertising. So if you make $100,000 net profit you should ideally reinvest 7-8K back into marketing your small business.
In our experience, most small business owners aren’t doing this! They spend closer to 3-4%, despite their ability to afford strategic marketing.
In fact, studies show that roughly half of small businesses don’t have a formal marketing budget plan in place.
If you’re not mapping out your priorities, how you’ll scale each year, and how much you’ll spend to get there, then you’re willingly leaving money on the table. And you might be spending the frugal marketing budget you DO have on tactics that aren’t a good fit for your customer base.
Let’s talk about the different marketing channels you may want to explore in 2022 and how much each will cost you.
How to Plan Your Marketing Budget Per Channel
As we mentioned above, splitting your marketing budget per channel is wise because it allows you to really analyze your ROI for each channel. Armed with this data, you’ll adjust your spending based on performance and make the most of your budget.
Should you invest in email marketing, organic social media, and social media ads to pay-per-click advertising, search engine optimization, content marketing, or website maintenance? You’ll have to consider your small business goals and priorities and decide how much you want to reinvest in business growth.
Here’s a breakdown of the percent of your total marketing budget per channel we suggest investing to see worthwhile results.
Organic Social Media Strategy and Management
20% of your annual marketing budget
Social media is mandatory for any successful, growing business in 2022. Why? Because there are over 3.78 billion social media users worldwide, including 84% of Generation X, 81% of Millennials, and 45% of Baby Boomers. Your customers spend an average of 2.5 hours per day on social networks. If you’re not meeting them where they hang out, then they’ll likely choose to purchase from your competitors that ARE active on social media.
Budgeting for social media services falls into two distinct categories for small businesses: organic social media (unpaid tactics) and social media advertising (paid tactics).
Most businesses spend at least $1,000 on organic social media marketing each month—and anywhere from 15% to 25% of their total content marketing budgets on social media marketing. So we recommend you reserve 20 percent of your annual marketing budget for organic social media.
What Will You Get?
Organic social media agencies might offer:
- Social media strategy planning.
- Graphic design and image manipulation.
- Copywriting for optimized captions.
- Hashtag research and strategy.
- Post scheduling, proofing, and formatting.
- Daily or weekly engagement, like comments and dm responses.
- Social media outreach to build relationships and partnerships.
- Execution of your influencer marketing strategy.
Paid Social Media Advertising
20% of your marketing budget
Social ads budgets are projected to total $177 Billion in 2022, overtaking TV advertising and other ad platforms. Paid social spending increased by 15.6 percent in 2021 alone, and this insane growth is only going to continue to trend up in the future. As you map your marketing budget per channel, we suggest dedicating at least 20% of your annual budget to social media ads.
We suggest that you split your total social media budget 50/50 between organic social media marketing and social media advertising.
Social media advertising can be a gold mine for small businesses, but you must first build trust through consistent audience engagement, positive social media, and user-generated reviews and testimonials.
The good news? It’s totally possible to make an impact with a smaller paid social media advertising budget! If you only have a few hundred dollars per month to invest, make sure you get VERY specific with your targeting. The more niche your audience, the more effective your ads will be. If you need assistance with advertising strategy and optimizing your ads, we’re always here to help you get started!
Once you see first-hand how great the return on investment is for this tactic, you’ll likely choose to dedicate MORE than 20% of your budget to social media ads.
What Will You Get?
Your social media advertising manager might offer:
- Overall social media ads strategy and planning.
- Social media ad account setup and analytics setup.
- A/B tests to find the best ad images, video, and copy combos.
- A set number of ads per month, including design and copy.
- A set number of hours for ad optimization each month.
- Weekly, monthly, and quarterly advertising analytics and reporting.
20% of your annual marketing budget
Email marketing is an old standby for a REASON. It works!
Marketing emails have an ROI of $36 for every dollar spent! And email strategy is shockingly affordable. For many small businesses on a budget, we often prepare a set of email marketing templates that can be filled in each week. This helps our startup clients send as many campaigns as they like throughout the year without breaking the bank.
Why is email marketing so effective? Because you can communicate directly with your customers in their inbox, nurture and convert new leads, and keep existing customers engaged with your business! We’ve also seen great success growing small biz email lists with social media advertising and website pop-up lead forms. These are super affordable, quick projects for small business owners—services that get requested constantly at LoudBird!
While it may not be new and glamorous, we recommend that you reserve no less than 10 percent of your B2B or B2C marketing budget for email campaigns. Especially if you can strategically pair email marketing with complementary tactics, like SEO and content marketing.
What Will You Get?
Your email marketing professional might offer:
- A/B testing to optimize new email marketing campaigns.
- Email campaign setup and management within your chosen mail platform.
- Advice on which platform you should use and other email marketing consulting services.
- Strategic email templates that you can customize yourself each time you send a new campaign.
- Drip email campaign templates, like a welcome journey for new subscribers and other conversion-oriented, targeted email campaigns.
- Full-service email marketing, including weekly custom email designs.
- Weekly, monthly, and quarterly reports to help you optimize your email campaigns.
Website Maintenance and Web Design
10% of your annual marketing budget
Did you know eighty-nine percent of customers will abandon your website for the competition if they have a bad user experience? And nearly 40 percent will leave your site if the content doesn’t answer their questions and provide value. It doesn’t matter how much money you spend on marketing, if your website sucks no one will trust your company!
That’s why you MUST dedicate around 10% of your marketing budget to website maintenance and website design improvements.
Completely unhappy with your website and you know it needs a complete overhaul? Then you’ll want to set aside a larger, one-time budget to make sure your small business website is beautiful, user-friendly, and loads quickly on all devices. We’ve worked with many product-based and service-based small businesses in the last year to make their websites 100% mobile-friendly. This is a huge priority in 2022 because Google has started penalizing sites that aren’t optimized for mobile! And 72.9% of consumers used their smartphone to make purchases and secure services in 2021.
We talk about this more in the “Larger, One-time Expenses” section below, but you can also check out our HOW MUCH DOES A SMALL BUSINESS WEBSITE COST IN 2022? guide for in-depth info!
What Will You Get?
Your web design firm might offer:
- Regular updates to your CMS (like WordPress).
- Diagnosis and repair of incompatibilities between your CMS and important plugins.
- Repair of minor formatting issues on the front end of your site.
- Site speed improvement through website optimizations (minifying CSS, compressing new images, removing unused plugins, etc.).
- Small changes to your website copywriting, SEO, images and designs, and product descriptions as needed.
- Cool new promotional features, like popups and plugins, to encourage referrals, reviews, or content discovery.
Pay Per Click Advertising (PPC)
30% of your annual marketing budget
Many small businesses shy away from PPC because it requires a ton of expertise to execute correctly. And it can get spendy, to be honest. But, when done right, PPC can be affordable and have a very high ROI for small businesses! If you have a PPC strategy, your biz can earn an average of $2 for every $1 spent on PPC.
If PPC is a good fit for your audience, we recommend you dedicate roughly 30% of your small business marketing budget to PPC.
But we have a few caveats! PPC for small businesses works best if you are NOT in a super-competitive industry. If you’re a LOCAL business with local customers, PPC is for you! You can narrow the field of your efforts to target your ideal customers affordably. But if your audience is national, you’re in a competitive industry, or you have a super broad customer base, we’ve found it’s difficult to get results with PPC without a sizable budget of $5-15K per month.
Most national small businesses spend at least $10,000 per month on PPC. And they’re happy to shell out that amount for PPC ads on Google and YouTube because it skyrockets their profits. But if you don’t have the budget, you just don’t. Save up for PPC in the future and try social media ads instead!
What Will You Get?
Your PPC advertising agency might offer:
- Overall PPC strategy and planning.
- PPC ad account setup and analytics setup.
- A/B tests to find the best PPC strategy for your business.
- Optimized adverting design and copywriting.
- Monthly ads optimization and campaign monitoring.
- Weekly, monthly, and quarterly analytics and reporting.
On-site SEO and SEO Content Marketing
30% of your annual marketing budget
SEO is the small business marketing tactic that has the highest ROI, in our experience. Especially for B2B businesses! But SEO growth doesn’t happen overnight— it’s a long play. SEO content marketing truly starts returning the best results AFTER 6 months. Or longer!
So why do we still advise our clients to reserve 30 percent of their content marketing budget for SEO content marketing, including blogs and website resources?
Because the first three results on Google receive 75.1% of traffic.
Once your SEO content has been indexed by Google and starts acquiring search traffic, SEO becomes THE BEST and MOST AFFORDABLE tool to bring qualified customers, clients, and patients to your website.
You’ll see dividends from SEO investments for YEARS. And once you pay the initial fees to get started, SEO leads and sales are 100% FREE.
What Will You Get?
Your SEO agency or content marketing agency might offer:
- An SEO-focused content marketing strategy plan to help you understand how your website can rank faster with SEO.
- Competitor research for new websites or sites that have never had an SEO audit.
- At least one technical SEO audit per year to make sure your site is ranking for relevant keywords, and tell you how you can improve through daily, weekly, and monthly goals.
- Technical implementation and annual maintenance on the back end of your website (title tags, metas, alt tags for images, resolving any dead pages with redirects, etc).
- Monthly SEO blog posts (we recommend at least 4 for max results).
- Link-building services to improve your website’s backlink profile.
- Bogus monthly SEO maintenance packages (steer clear of these, they’re completely unnecessary for small businesses)!
Do You Need to Save for Larger, One-time Expenses in 2022?
If your small business is brand new or needs a major overhaul in 2022, you may need to plan for these additional one-time expenses.
Branding and Brand Strategy
Does your branding (logo, color palette, typography and fonts, messaging, mission statement, brand voice, tone, and VIBE) resonate with your target audience? Did you hire a legit designer or branding agency to help you with brand positioning, logo design, and a brand identity kit?
Or does your logo and branding feel amateur? Did you cheap out on logo design when you started your biz because you just didn’t have the budget for professional branding? That’s ok! Sometimes you just don’t have a branding budget when you first found your biz. But…
If you haven’t invested in professional branding and your small business is struggling to make sales, crappy branding is likely the culprit.
You’ll need to start setting aside funds for a proper branding kit ASAP. Get more in-depth branding budget guidance in HOW MUCH DOES BRANDING COST FOR SMALL BUSINESSES? (2022 EDITION).
Website Design and Development Refresh
Does your website suck? Are you losing sales and leads because your website is ugly or hard too use? Wasting money on advertising only to have customers bunce from your site because it doesn’t look trustworthy? Well, you’re not alone!
In fact, 80% of small business owners surveyed by Forbes said a better customer experience was one fo their top 5 goals for 2022.
Are you planning to revamp your website or launch a brand new small business website in 2022? Here’s our breakdown of HOW MUCH DOES A SMALL BUSINESS WEBSITE COST IN 2022?
We always advise small business owners to look out for these 10 common red flags when hiring a website designer and to consider these 13 important reasons to avoid hiring a freelance web designer before signing a contract in 2022.
Friendly reminder: we’re available to help you with any website design and development services you might need!
SEO (Search Engine Optimization) Audit and Implementation
If you’ve never had an audit, it’s been a few years since your last audit, or you’re previous SEO agency…well…sucked…
Then it’s time for a comprehensive technical SEO audit and back-end implementation.
Without strategic SEO, your site may fail to index with search engines like Google. That means your products and services won’t show up in online searches when your ideal customer, client, or patient is actively searching and wants to make a purchase!
Small businesses typically only need an SEO audit every 2 years or so, so it’s a very wise investment. And, as we said above, it’s basically FREE advertising!
Ok…These Budget Percentages DO NOT Add Up!
That’s because, as a small business, you’re likely not going to have the budget to use every single marketing channel. If you try, you will be spreading your funds and time too thin. You won’t see results from ANY of your marketing channels if you go this route.
To get the best return on your investment, you need to determine your annual budget and invest in ONLY the channels that are the best fit for your business model, business goals, and target market. Outline the specific results you hope to achieve with your small business budget per channel.
Here’s How You Should Invest Your SMB Marketing Budget
- Make your website awesome so you’re sealing the deal when customers come to it to learn about your products or services.
- Your SEO should be rock-solid—this is basically free advertising that you invest in once! And strategic SEO just keeps on bringing qualified, ready-to-convert traffic to your site.
- Master one or two social media platforms. DO NOT spread yourself thin—it waters down your efforts and is just plain stressful! Instead, focus on one or two that will have the most impact. Build your organic social presence and THEN invest in paid social media ads.
- Nurture prospective and current customers with email marketing. Email has a solid ROI for small businesses! If you’re sending professionally-designed email templates with stellar sales copy, you’ll convert new customers and encourage repeat purchases.
Get Help Planning Your 2022 Budget and Marketing Strategy
If you want to slay your digital marketing in 2022, let us walk you through how we help our clients get organized, determine their marketing strategy, and refine their marketing budget per channel for better results. Solid marketing strategy and a defined small business marketing budget per channel marketing strategy can increase profits, help you reach more qualified leads, earn more sales, and build a positive online reputation for your brand.
Send us a message NOW to get started with your free consultation! And make sure to check out the success stories of our past and present clients for inspo.