Where should you spend your marketing budget in 2020?

In general, small businesses allocate 7% to 12% of their gross revenue to marketing. This compares to the Small Business Administration’s suggestion to spend 7% to 8% on marketing. Of this amount, the total digital marketing budget is expected to reach 45% in 2020, up from 42% in 2019. The largest share of digital marketing spend will go to video marketing, and social media ads will account for 25% of the budget. . average digital marketing budget. Let’s dig a little deeper to see how you should spend your marketing dollars.

Calculating your marketing budget

It’s not too difficult, just follow these steps:

1. Identify your gross income: This is income before any expenses, deductions or allowances. If you are a new business or the market has changed, you can use estimated earnings.
2. Determine your ideal marketing budget: If your business is less than five years old, your budget should be between 12% and 20%. You have to spend a hefty amount to help establish name recognition. Older companies should budget between 6% and 12% unless you are establishing a new brand name.

For example, say your company is a startup and you expect to gross $100,000 in the first year. With a budget between 12% and 20%, your marketing spend should be between $12,000 and $20,000.

On the other hand, let’s say your business is 10 years old and makes $1 million a year. With a budget of 6% to 12%, you should expect to spend between $60,000 and $120,000 this year on marketing.

Allocate your budgeted funds

To know how to allocate your 2020 marketing budget between online and offline channels, you need to look at what worked in 2019. To get started, identify the 5-10 most successful marketing strategies in 2019 in terms of leads and sales. Break down information to categorize your marketing spend from the previous year, including:

• Branding
• E-mail
• Events
• Public relations
• Print ads
• SEO
• Social networks
• Training
• Website

The quality of your marketing data will help determine the value you can derive from this exercise. Whenever possible, you want to spend money on the strategies with the best marketing return on investment (ROI).

Understanding the 2020 Digital Marketing Trends

When thinking about your marketing spend, consider these trends:

1. More than 90% of customers say they rely on influencers to help them decide on their purchases. In other words, it makes sense to allocate money for influencer fees.
2. You really can’t afford to ignore video because it gets results. You can create streaming or live videos for a low cost. Check your community resources for companies that can handle video for you.
3. Sophistication is on the rise. Look for increased use of artificial intelligence, video search and 5G networks.
4. You can better convert your website visitors into leads by making your site more interactive. Consider adding live chat, quizzes, games, and even virtual reality.
5. Do you understand micro-moments? These are cases where people instinctively use their device(s) to do, watch, discover, buy or learn something. In a micro-instant, people are ready to decide and/or spend money. For you, that means helping visitors act on their micro-moment. You do this by providing value, including timely articles, links to valuable resources, tools, support services, and more, on websites and apps.
6. Be aware that smartphones could eclipse websites this year in terms of video advertising.
7. Focus your marketing on the most relevant social media sites for your potential customers, be it Snapchat, Instagram, Twitter, Facebook, YouTube, etc.
8. Never forget that content is king. This means that you need to allocate enough budget to pay for high-quality, authoritative and timely articles using SEO features to generate organic presence in search results.

How IOU Financial can help you

Frequently, a disconnect develops between revenue collection and marketing expenditure. In other words, you may need to borrow money to implement a timely marketing strategy. IOU Financial can provide fast, hassle-free funding so you can achieve your marketing goals on your schedule. Contact us today for more information.