7 elements to consider when allocating your digital marketing budget

In the fast-paced world of digital media, corporations and startups are rushing to draw consumer attention to their brands on a global scale.

Therefore, effective communication has become easier and more convenient in recent years; The widespread adoption of technology and the Internet now allows companies to directly contact potential customers, building a loyal fan base along the way.

On the one hand, we see how companies of almost every size have a dedicated digital marketing budget and strategy.

Although this is a crucial aspect for them; To ensure they can compete against their direct competition, it also increases the level of experience required to get the best results.
Having a digital marketing strategy may seem worthless if there is no savvy capital to help drive results and build expertise as the business grows.

The funds allocated to the marketing budget and strategy depend largely on the type of business and the sector in which you operate.

In addition, those responsible for marketing will also have an influence on the amount of annual revenue that should be allocated to driving a targeted marketing strategy and managing the funds allocated to each project.

As a small business owner, setting up a digital marketing budget can seem daunting. But if you can master the tedious planning and structuring, you will easily know exactly how much resources and capital are needed to create the right marketing budget for your business.

`Entrepreneurship KSA lists the 7 elements you should consider when allocating your digital marketing budget:

1-Understanding the sales funnel

The sales funnel, often referred to as the sales cycle, is the process a potential customer goes through before making a final purchase or sale.

Although it is not possible to create an individual marketing strategy or budget for each type of customer, it is best to understand the sales cycle a customer goes through before becoming a paying customer.

Throughout the process, it is important to include digital marketing tools and resources, such as:

-Free stuff.

-Video clips.


-Other media.

2-Setting marketing goals

Having a strong digital marketing team and budget can help push your business to the next frontier.
But it may seem pointless to have all of this, without having clear marketing goals.

Marketing goals can look different for every business, but from the start before allocating any financial resources, consider what you want to achieve, and what kind of financial resources will be required to achieve it.

Each quarter is part of the marketing strategy; Therefore, marketing objectives must be set together with your team members. This will give a clear picture of where the company is headed, and what your business needs to succeed.

3-Evaluating previous strategies

As you create your new budget, take some time to step back from your previous marketing efforts, to see how you can improve in the future.

Evaluating your past strategies will shed light on many questions, such as:

-What worked, and how much capital was available at the time?

-How did you manage to solve the previous problems, and is there a need to increase spending?

-Which channels have been more successful than others?

-How much did you spend on digital advertising? Did it give the return that you aspired to?

If you notice that certain tactics have worked for you in the past, there is a small chance that they will work for you again.

Just be sure to take the time to test these strategies before fully committing to them.

4-Think about the costs of content marketing

Content marketing is one of the most successful ways to retain customers while keeping them engaged at the same time. Statistics show that, on average, companies spend 46% of their marketing budgets on creating engaging content.

Although publishing content online is free, the cost of paying business owners and creators to create new content regularly is what quickly starts eating into marketing budgets. While it is possible to hire an in-house creative to complete these tasks, business owners and entrepreneurs will need to consider the difference between hiring a full-time employee, or paying a freelancer.

Moreover, it should also be important to consider how much freelancers charge for certain jobs, and what their timeline is until delivery.

5- Consider different options

With a variety of communication channels available, companies are often left with the difficult task of selecting a digital product that can be used to advertise their business effectively.

Not every platform or digital tool will work the same, and depending on the type of product or service you’re looking to advertise, it doesn’t mean that every platform will work the same way every time.

You’ll also need to consider your target audience; Whether they use these types of platforms, and how they interact with the content available to them.

Consider how you will use each platform for different products or services; This will help determine the amount of capital required to boost content creation and digital ad spending.

6-Capital allocation

Once you have a marketing strategy in place, you can start working with the 70-20-10 rule when allocating money to your strategies.

70%: You should allocate to marketing strategies that fit your business and marketing goals.

20%: This should be spent on creating new strategies and developing new marketing tactics that can help grow your business.

10%: for experimental digital marketing, which is used to test new strategies for the future.
Experts suggest that you give more priority to digital marketing strategies that have been successful in the past. This will help give you a clear indication of how much money to allocate to these types of strategies.

Finally, it is quite clear that you should allocate less money to those strategies that have been less successful, or have failed and given you little returns in the past.

7-Think about the extra expenses

With the majority of the budget now devoted to an overarching marketing objective, it’s time to start factoring in additional marketing expenses, such as:

-Website management.

-Paid search.

-Paid social media ads.

-Google Ads.

-Graphic design costs.

-Content creation costs.

-Video creation.


Setting up a marketing budget – albeit a small budget for startups and small businesses – can seem like a daunting task. Especially if you are unsure of the amount of capital required to further your marketing efforts. But it’s important to consider your marketing budget against your overall marketing goals, look at what you want to achieve, and how your marketing strategies will drive traffic and overall sales.

Once you have a clear idea of where you’re looking with your marketing strategy, you’ll soon start to find it much easier to allocate the right amount of money to each segment of the budget.

Finally, be open to making changes when needed; This will help you plan and save better in the future.

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