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What should I spend on internet marketing for my small business?

Category: General Published on Feb 28

With more and more of the large corporations, spending a large part of their total marketing dollars on online marketing, many small businesses owners think they have to follow suit. But moving a large part of your small business marketing budget online may not be what you should be doing.

Let´s look at the reality of the situation and why large corporations are spending more money on online advertising, and why it is a good idea for them, but not necessarily for your small business. Take a look at any large corporation website, not just to see how well or poorly the design is, but what see what you can do on their websites. In most cases you can order something, get in touch with them 24/7 or get a quote while you are sitting there. Their websites have turned into 24/7 money making machines, so it doesn´t matter what time of day you as a user go to their site. Chances are that these companies will be able to close the sale.

What does this mean for you as a small business, looking to start doing some online marketing? First of all you have to make sure that your website has the capabilities needed to support this type of marketing. This means that your website has to look good enough to create a “want to do business with them” first impression. Secondly, there has to be a way for you to close the deal or at least get a chance to close the deal. Third is making sure that the user has some way of leaving a trace of them being there. Lastly but just as important, you have to be able to track your user stats and see what people did while they were there. Once all of these things are in place you can consider putting some money into your internet marketing.

Now that you understand, that without a good website internet marketing is useless, we can finally start looking at answering the questions about how much you should be spending on your internet marketing. Even though this answer is not as black and white as we would like to be, then here is how you can estimate how much you should be spending. To make the math a little easier we are going to use some dummy numbers. If you marketing budget is $1,000 per month between everything you do for marketing. This includes the time you spend on networking, buying business cards and everything else related to marketing (the numbers add up quickly when you take your time into the equation).  Let´s say that you are using about $500 per month on networking. (If you charge $50 an hour, then that is only 8 hours of your time each month plus the cost of the events). Then you should be spending at least 50% of that on your internet marketing, or about $250 each month. The other $500 you have each month, then cover all other marketing expenses such as flyers, business cards, tradeshows and so on.  

If you only spend about $200 each month on networking, then we suggest you use at least half of that budget for you internet marketing. You would probably be amazed at what kind of results you can see on a budget as low as $50 or $100 each month for internet marketing. Because internet marketing allows you to easily calculate the ROI on your marketing dollar, it is also the most measurable way of doing marketing in the business environment today.