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What is a Reasonable Marketing Budget?

Posted on May 9, 2024 | Drew Medley

What is a Reasonable Marketing Budget?

As businesses aim to establish a significant presence in their market, setting a reasonable marketing budget becomes increasingly important. Every dollar counts, and knowing where to invest it can make the difference between making waves and barely making a ripple in today's competitive market. With multiple channels and strategies to consider—from Google Ads to social media, SEO, and beyond—allocating the right amount of resources helps businesses achieve their goals. 

Furthermore, we’ll reveal how effectively distributing this budget, whether through in-house efforts or outsourced marketing, can significantly impact the effectiveness of your promotional activities.

What is a Marketing Budget?

A marketing budget is a financial strategy used to manage marketing activities' expenditures within a specified timeframe. It encompasses all the costs associated with promotional endeavors, such as advertising, paid campaigns, staff salaries, outsourcing services, and any technology or tools necessary for marketing purposes. An effectively planned budget enables companies to keep a tight rein on expenditures and assess the efficacy of their marketing tactics.

Industry Benchmarks

Based on recent surveys, small to mid-sized businesses typically spend 7-12% of their overall revenue on marketing. However, this percentage can vary widely depending on factors such as the business stage, industry, and market competition. For instance, new businesses may need to allocate higher percentages to establish their brand, while established companies may allocate less but focus more on optimizing and scaling successful channels.

Planning Your Marketing Budget

Evaluate Past Performance

First, evaluate your past performance by analyzing your spending from previous years and your ROI. This data can provide valuable insights into which marketing channels have worked well for you and where you might need to cut back. 

Define Business Objectives

Next, you should define your business objectives and align your budget accordingly. Your marketing goals will dictate your spending priorities, so it's essential to have a clear understanding of what you want to achieve. Your objectives should be specific and measurable, whether it's increasing brand awareness, generating more leads, or enhancing customer engagement.

Consider The Latest Market Trends

In order to maintain a competitive edge in the market, it is important to stay informed on the latest industry trends and emerging technologies. If you invest in new platforms or tools, you can stay ahead of the curve and boost your business. However, it’s important that any new investments align with your business goals and have a clear potential return on investment (ROI). By doing so, you can make smart decisions that will benefit your business in the long run.

Allocate Your Funds Wisely

Finally, you should allocate your marketing budget wisely by distributing it across various channels based on their past performance and potential ROI. To optimize the allocation of your marketing budget across various channels like SEO, Google Ads, and content marketing, consider both the past performance of these channels and their potential return on investment (ROI). Here's a recommended approach to budgeting for these key areas:

SEO (Search Engine Optimization):

  • Budget Allocation: Allocate about 30-40% of your marketing budget to SEO. This channel typically requires a substantial initial investment but pays off with long-term organic growth.
  • Rationale: SEO efforts involve optimizing your website, content creation, link building, and technical improvements that can take time to mature but result in sustainable visibility and lead generation.

Google Ads:

  • Budget Allocation: Dedicate around 20-30% of your marketing budget to Google Ads.
  • Rationale: Google Ads offer immediate visibility and can quickly generate traffic and conversions. The budget should be flexible enough to increase in high-performing periods or scale back during lower-performing times. This budget allocation allows for testing different keywords and optimizing ad spend based on performance data.

Content Marketing:

  • Budget Allocation: Invest 20-30% of your marketing budget in content marketing.
  • Rationale: Content is important for both SEO and engaging potential customers. This budget should cover creating high-quality, valuable content that appeals to your audience, such as blogs, white papers, videos, and infographics. Well-crafted content helps establish authority and can be used to nurture leads throughout the sales funnel.

Other Marketing Channels (Social Media, Email Marketing, etc.):

  • Budget Allocation: The remaining 10-20% of your budget can be distributed among other channels like social media, email marketing, and other digital or traditional marketing efforts.
  • Rationale: These channels complement the above strategies by enhancing direct communication with your audience, promoting content, and supporting overall brand awareness and customer loyalty.

Tools and Techniques

Utilizing advanced tools and technologies is essential for a successful marketing strategy. CRM, analytics, automation, and content management software can be significant but worthwhile investments. Remember, while tools can be expensive, the right selection can significantly enhance efficiency and campaign outcomes.

The Role of Outsourced Marketing

For many businesses, especially small to mid-sized firms, without extensive in-house capabilities, outsourced marketing presents a cost-effective solution. By tapping into the expertise of a dedicated agency, businesses can enjoy the benefits of advanced strategies and tools without the overhead associated with a larger in-house team. Agencies like The Diamond Group specialize in leveraging these tools to maximize your marketing budget, ensuring every dollar spent contributes to tangible business growth.

Adjusting Your Budget

Marketing is not a set-it-and-forget-it aspect of your business. It requires constant adjustment and optimization based on performance metrics and changing market conditions. Regular reviews and adjustments ensure that your marketing spend remains effective and agile, responding appropriately to new opportunities and challenges.


Setting a reasonable marketing budget is necessary for sustaining and growing your business. It involves understanding your financial capacity, aligning with business goals, and staying flexible to adapt to market changes. At The Diamond Group in Wilmington, North Carolina, we offer expert guidance to help you allocate your marketing resources efficiently and effectively. Partner with us to transform your marketing strategy into a powerful driver of business success.

Ready to optimize your marketing investment? Reach out to The Diamond Group today for strategic insights and solutions tailored to your unique business needs. Let’s elevate your marketing together!

About The Diamond Group

The Diamond Group is a Wilmington, NC based digital marketing and web design agency committed to helping today's small businesses grow and prosper. With a 28-year track record of success, their proprietary in-house system and concierge-level multi-disciplinary team approach to marketing guarantees double-digital growth and optimizes marketing ROI. 

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