Much speculation has taken place regarding how much a business should spend on digital marketing. Whether this is a dollar amount or a percentage, the expectations for what a company must pay to make an effective campaign possible has changed. And not being able to accept change could leave your business behind the eight ball as the future shakes out.
SteerPoint works with companies of different sizes daily on maximizing their reach online. Here’s our forecast for the future of digital marketing costs.
Where We Were – 2012
First, let’s take a look back at where we were. In an article from the Gartner, Inc., a Connecticut-based leader in IT research and data gathering, companies were spending 10% of their revenue on marketing in 2012. Only 1/4 of that 10% was spent on digital marketing. Most telling from the study, though, was that only 3% of those surveyed were spending over half their budget on digital marketing. Things are certainly different now!
Where We Are – 2017
The rise of social media advertising and shifts in PPC have altered the spending landscape in 2017, and businesses paradigms need to shift to make sure they’re getting the most out of their online marketing. But increases in price aren’t the main reason for businesses to up their digital spending – that would be from the increased reliance of people on platforms like Facebook, Twitter, and LinkedIn.
Where We Will Be – 2020
Digital marketing spends will continue to hit new heights as we enter the next decade. As more millennials enter the workforce and have more discretionary income, companies will rely less on TV and radio advertising than ever before. The result of this will mean a more effective campaign through social media ads, and a greater percentage of ad spend will make sense for marketers.
But the cost of social media ads and PPC campaigns will also increase because companies like Google and Facebook will learn their worth and quickly adjust pricing to reinforce their bottom line.
The point is that it’s critical to realize that digital marketing spending will only continue to rise. Failure to keep up will be detrimental to your business now and in the future. So if your business needs consultation in 2017, contact us at SteerPoint to see how we can help.
Thanks for reading!