What should be your budget for Digital Marketing

Have you ever researched on Google-How many people are using the internet in India?

No? No problem read ahead to know the count.

As of December 2018, India ranks the second largest in online market with over 566 million internet users. No doubt, the internet users are going to rise approximately to 627 million by the end of this year. This is a significant increase in comparison to the previous years, considering the internet penetration rate in India stood at about 10 percent in 2011. Furthermore, men dominated internet usage in India with 71 percent to women’s 29 percent. Being in the second rank; India’s internet consumption in the urban area was at 64.84 percent in December 2017. However, internet penetration in rural India was at 20.26 percent in December 2017.

Regardless of the growing internet users, some of the audiences still rely on offline resources. Over 50% of India’s population still prefer other mediums than digital. 475 million people watch TV, print media reaches to 282 million individuals, and radio reaches 110 million people.

So, how much can online marketing help businesses and customers? Online marketing helps to create, deliver and communicate the value of product or services. Businesses that are offline need to have some involvement with the online world. Because Now-a-days it’s easy for customers to go digital and research about the offline store. People turn to the web, again and again to connect with other people, sharing files, entertainment, information and lots of other activities that are useful and beneficial in many terms. To put it simply, online marketing amplifies the word-of-mouth in terms of speed and reach.

Online business revenue has steadily grown as compared to offline year after year. This means that now people are spending on search, email and social rather than radio, television, and newspaper. And this is expected to be continued for several years.

So how to hit the sweet spot when allocating budget to digital marketing?

Since Digital is a part of marketing, Let’s start there. For marketing budget, start with looking at your industry or your company revenues.

Here are some budget allocation percentages you can look at.

Marketing budget as percent of firm budget

B2B product9.2%
B2B Service8.9%
B2C Product16.0%
B2C Service14.9%

Marketing spending as percent of company revenues

B2B product 6.3%
B2B Service 6.9%
B2C Product 9.6%
B2C Service 11.8%

Now, For digital marketing; I recommend that a business should invest 30% of their entire marketing budget for their digital marketing. One should not go overboard with the spends just yet, because, however fast the digital landscape is growing, data consolidation is yet to mature to a level that it can be used without much spillage.

But the bigger question is, how to allocate marketing budgets across channels – offline and online.

It is observed that marketers don’t suffer from allocating the budget, they suffer from getting the ROI of that budget and because they don’t get the ROI, the budget for the next Financial Year is cut to slices. So, how to get the best from your marketing budget? Stay tuned! you’ll see an article shortly!

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