Knowing what the investment in marketing is and how much companies are currently investing in their digital marketing areas will allow you to project what you should invest if you are an entrepreneur, while if you are a marketing professional you will be able to be clearer about numbers and money in order to make the best decisions.
A Forrester Research report shows the estimated allocation of marketing funds, both offline and in digital channels. Some conclusions of this report are:
In 2020, the average company was gambling data korea expected to allocate 30% of its marketing budget to the Internet, this rate is expected to grow to 35% by 2022.
Search engine marketing (SEO and SEM) will capture the majority of online spending.
Online display marketing (banners, videos, etc.) will take the second largest share.
Social media spending will continue to grow as a percentage of overall online spending, but will only account for about 15% of total online spending.
Mobile marketing has grown to a point where it is no longer tracked separately and is assumed to be included across all channels.
Marketing investment and the need for leads
Lead generation is about attracting all the people who are interested in your brand, products or services to your business and converting them into customers.
Between 2022 and 2023, leads, or potential customers, have become a great need for all types of companies. Receiving data from people interested in our products or services has been, over the last two years, the most important input that can be had to close a sale.
Hubspot points out some specific investment statistics for generating leads in companies. Statistics that you should know, because like thousands of entrepreneurs or marketers, you will be on the crusade this 2022 to obtain a greater number of potential clients.
The average value per lead is just under $200 USD. (HubSpot, 2017).
On average, organizations generate 1,877 leads per month and 1,523 MQLs. (HubSpot, 2017).
Organizations generate, on average, more than 470,000 website visitors, 1,800 leads, and 300 new customers per month. (HubSpot, 2017).
An important factor that can help you determine the amount of your marketing investment is the Lifetime Value (LTV). By measuring the net profit you will get over the course of your relationship with the customer, you can deduce its value. It can be calculated by multiplying the average sales revenue by the gross sales margin percentage x the retention rate.
Return on Investment and clicks
The amount to invest in cost per click can be determined by the return on investment you want to achieve. For most companies, a revenue/advertising ratio of 5:1 is considered acceptable. This means that for every dollar invested in advertising, $5 in revenue will be obtained.
In an article in Business Week, Steve McKee, president of marketing consultancy McKee Wallwork & Company, says that “companies should start by investing 5% of their total revenue and adjust this percentage based on market size, media costs, information about competitors’ spending, and the rate of growth they want.”
For its part, Chief Marketing Officers (CMO), the committee that conducted a global survey with 6,000 CMOs from various companies , found that 58% of them spend less than 4% of gross revenue on outreach; 16% spend between 5% and 6%; 23% spend more than 6%; and 2% spend more than 20%.
Forrester draws some conclusions in this regard:
Marketing budgets are increasing.
More money is being spent on digital, at the expense of traditional advertising channels.
Total marketing budgets range from 7 to 12% of total revenue.
B2C companies generally spend more on marketing compared to B2Bs.
Smaller businesses spend more on marketing as a percentage of their total revenue.
Search and display marketing accounts for the majority of digital budgets.
As you can see, what marketing investment you should make and how to do it will depend on various factors. We hope that the data we have shared with you today will help you make the right decision.
