How Much Does The Average Small Business Spend On Advertising – / Blog / Marketing / What is an average marketing budget for a small business with a breakdown?
A few decades ago, small business marketing consisted of a sign at a store and an ad in the local newspaper. Now it’s a website, content marketing, SEO, SMM, PPC, email, AR/VR and more, as well as an in-store sign and an ad in the local newspaper. Of course, with the expansion of channels, marketing costs have increased. In the article you’ll learn how much they’ve grown: How much does an average small business now spend on marketing, separate from the main channels of communication with customers.
How Much Does The Average Small Business Spend On Advertising
According to the Clutch and The Manifest polls, the majority of small businesses in the U.S. spend an average of $10,000 to $50,000 annually on advertising and marketing, and all say they plan to spend even more on promotion next year. .
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According to SageWorks analyst Libby Bierman, small businesses that spend $10,000-$50,000 on marketing account for about 1% of their revenue. So, if a business earns $500,000 a year, advertising will cost $5,000, if sales are $2 million a year – $20,000. Of course, in some industries, small businesses spend significantly more than 1% (retail), and in others much less (manufacturing).
In addition, the size of a small business’s marketing budget also largely depends on the age of the owner. Therefore, Millennials spend the most on advertising, seeing it as an important tool to achieve their goals, while Generations X (Gen X’ers) and Baby Boomers invest in advertising. feel “obliged” to do, and so they do. There is no plan to optimize advertising strategies and spend “a lot” on them.
How much do small business owners of different generations spend on marketing? In 2019, Millennials are people between the ages of 18 and 34, Xers are between 35 and 54, and Baby Boomers are over 55. Image source
Left: Which channels will small businesses invest more in in 2020? Image source. Right: Which Digital Marketing Channels Do Small Businesses Prefer? Image source
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As various studies show, most small businesses invest in digital marketing willingly. At the same time, the majority of businesses enter the market through websites (62%) and social networks (61%) and are set to increase their spending on these channels by 41% and 21% respectively over the next year. .
And this is a general trend for all generations, meaning that absolutely everyone sees digital marketing as a great tool to increase sales and increase brand awareness, and hence are willing to spend more on it.
Let’s see how much a small business spends on each digital marketing channel. Website Design Development Estimated cost to build a site – $3,000 to $100,000. Your business needs a site to showcase a product or service and convince potential buyers to choose you, not a competitor. If the site doesn’t perform both of these functions, it means you need to redo it or create a new site from scratch. The cost of such service depends on:
For example, if you create an online store from scratch, it will cost you $5,000, if you use CMS WordPress or a Shopify web store template – from $100. If you want to build a website with responsive design, this is another one. From 500 to 5 thousand dollars, the cost of integration with a database from 1 to 25 thousand dollars, and copywriting and SEO – from 60 to 1000 dollars.
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These numbers can be either higher or lower depending on which country you hire from. Therefore, the average rate of web developers in the USA, Canada and Western Europe is at the level of 80-100 dollars per hour, Eastern Europe and Asia – 40-80 dollars per hour, Africa – 20-40 dollars per hour.
Since most mobile users prefer to use web services through applications, you will most likely need to create one. If the application is relatively simple, then it is 3-10 thousand dollars and 2-3 months of development, if complex – 20-100 thousand dollars and 6-24 months. If your service already has a website with a backend, the cost will be slightly lower.
A mobile application is not necessary if you can connect to a mobile service that your target audience is already using. For example, restaurants can use food delivery apps like GrubHub, Eat24, UberEATS, Foodpanda, and others. You can rent out your property on Booking, Airbnb or OLX. You can sell products on OLX, Amazon, eBets or Etsy.
When linking to someone else’s application, you need to take into account the cost of hiring someone to work with those services, as well as the cost of the subscription or commission that the service charges as payment for its services. picks up.
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Around $600 to $5000 per month. This price includes keyword research, content optimization, link building, etc. to create SEO cover. Anything that increases your site’s ranking in the search results of Google and other search engines. This is useful because the higher your search engine ranking, the more potential customers will see your business.
Estimated cost, since there are many marketing agencies in the network, each of them has their own way of determining the cost of SEO services. Generally, the cost of such services depends on several variables, including:
In addition, the cost also depends on the optimization approach. Therefore, “spam” is a gray approach when building a link mass on low-quality sites, which is relatively cheap, but can lead to fines or bans in search engines. And there are strategies for building link mass using high-quality content, which can cost several thousand dollars per month and take 3 to 6 months of real time. Content – Marketing (text, images, videos) $1,500 to $10,000 per month. This includes researching the target audience, developing a content plan, creating content, distributing and promoting it, and building links. Content can be text, images, videos, images, infographics, graphics, gifs, memes and more. All this provides a constant flow of customers through organic traffic, even without advertising.
The cost of creating content depends on the complexity of the topic (industry), content needs, format and skill level, as well as who creates it:
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Social Media Marketing (SMM) around $200 to $10,000. The cost may include creating posts (text, images, videos), targeting, launching ad campaigns, interacting with customers, and more. Pricing depends on the complexity and amount of content, as well as the social network: According to The Manifesto, “Facebook (86%) is the most popular social media channel used by small businesses to advertise their business. followed by YouTube (51%), Instagram (47%) and Twitter (41%)”.
And according to Creative Survey, consumers also point to Facebook as the main channel for finding products and companies (49%), followed by Instagram (27%), Pinterest (22%), Twitter (14%). ) and Snapchat (12%) %). But, consumers prefer to make purchases outside of social networks: the Sumo Heavy survey shows that only one in five (18%) make purchases directly through social networks.
Similar to content marketing, marketing agencies, your company’s employees, or freelancers can engage in SMM. At the same time, small businesses prefer agencies, because there is no guarantee of quality, and it is economically feasible. Less often they hire freelancers who run multiple SMM projects, and almost no one hires an SMM box on staff.
From about 500 to 10 thousand dollars. It’s a relatively new digital marketing channel, which already brings big returns (often more than traditional monetization methods). At the same time, such ads aren’t too annoying for people: According to the IAB report, mobile ad spending grew 40% year-over-year, while desktop spending is flat or down.
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But the biggest advantage of ads in mobile applications is that it cannot be disabled using ad blockers. The ad will automatically close after the integration is complete or the user can close it 5-10 seconds after the show starts. Also, ads in a mobile application can be made interactive, which increases user engagement and, in turn, increases conversion.
Around 1 to 50 thousand dollars per month. It’s about pay-per-click ads on Google, Facebook, Amazon, and any other web platform. It is still the fastest and easiest way to increase traffic, number of subscribers, views and sales. And such ads can usually be targeted by various socio-demographic parameters – from gender to location on a particular street.
Affiliate programs range from around a few hundred dollars to 50% of revenue. An excellent marketing channel for small businesses, as it involves payment for desired action, not for impressions or clicks (following links). The specific price depends on the calculation method:
AR/VR marketing around 500 to 100 thousand dollars. Augmented Reality (AR) and Virtual Reality (VR) digital marketing uses advanced technologies that allow consumers to get closer to it.
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