SMB Digital Marketing Budget Guide



According to the U.S. Small Business Association, new or start-up businesses spend 3 to 5 percent of their yearly revenue on marketing. Want to know how your budget stacks up?

You know better than anyone that your business is unique and only you know what type of budget is best for your business.  But finding the balance between strategy and spend is not a cookie cutter technique. Here are a few things to consider when setting your marketing budget.




There are so many pieces to the marketing puzzle that there are libraries of books about it. But you don’t have to be a professional to know what’s best for your business.  When setting your marketing budget, here’s the best place to begin.


Consider Your Industry

If your company is in a highly competitive industry (like real estate, restaurants or insurance) the price of marketing is inherently going to be higher. Just because there is more a competitive atmosphere, doesn’t mean spending more money is the best tactic – being strategic and creative with your internal sales team or your agency partners is important. You need to use the marketing money you have to create smarter strategies.


Use Google’s Keyword Planner Tool


Google Keyword Planner

Google Keyword Planner is a valuable tool that gives you an idea of how many other businesses are bidding on specific keywords for advertising budgets. If their score is high, the industry is highly competitive. also provides insight into local and national competitors.

Understand the Innovation Adoption Curve

Understanding how the general public is going to perceive your business and services is an important piece to your overall strategy. The Diffusion of Innovation Theory describes how new and innovative ideas are, or are not, accepted by groups and cultures. It points out that there are 5 stages for a new idea to be accepted. Those groups are:

  • Innovators
  • Early Adopters
  • Early Majority
  • Late Majority
  • Laggards

Understanding this theory can have a big impact on how you present your business to consumers – especially if your idea is new. Some people don’t jump on the bandwagon as quickly as others. What this means for you is that you not only have to sell to the innovators (risk-takers, highly educated, prosperous) but also to the laggards (more traditional, less socially active, difficult to change), and everyone in-between. Depending on where in the curve your business, you will have to save more of your budget for education and awareness strategies.



Defining your demographic means that you are pinpointing your ideal client – that person who needs your product or service and is willing to pay for it.   You can then target your specific demographic and spend more money relaying your brand message to those who are more likely to engage with and buy from your website or storefront.

Marketing Budgets Differ Based on the People You Target


The right tactics and strategies will help you connect with different demographics. Your budget will vary depending on those tactics.

An example of targeting by demographic is with television day parting. This means that you can purchase TV Ad space during different parts of the day or even days of the week. Just think about the types of people who are watching the 4:00 News and then the types of people who are watching the Primetime comedy blocks. Some TV audiences are more expensive to target and your budget needs to consider that.

Social media is another example but with the same story. The audiences that are most valuable to you, may also be the most expensive to target. Remarketing is a tool to help get around some of those costs but going directly to those who are looking for your products or services.

Overall, your budget is going to fluctuate based on your demographics – which might also change throughout the lifetime of your strategy as well.



Your marketing goals (and consequently your budget) will probably change based on your business’ mission, objectives and strategies for achieving those.

When you’re marketing a brand new business or service, you’ll want to build out a forward-spending budget. This means you’ll spend more money upfront to help build name recognition and brand awareness. You spend a larger portion of your annual budget upfront, and then taper off when you start to see results. Marketing budgets must be seen as cyclical, not a monthly expense.


Seasonal Marketing Needs Different Budgeting Strategies


Some businesses are seasonal. Think snow cone machines, Christmas tree pop-ups, school supply stores, plant nurseries and garden centers.  When sales are slow for these types of businesses (during the off-seasons), marketing and advertising budgets hold off. Instead, strategies are put in place that boosts engagement and sales once the busy seasons rolls back around.  Just like other departments, marketing is prepping for the busy season. Reserving a budget for high times means that you can stay competitive when it’s the most important.




Who is carrying out your marketing plans is also plays a key component to the strategy.  This could be your in-house marketing specialist, an agency or a combination of the two.

Unless you have someone on your team who is a designer, developer, webmaster or social media coordinator, you’ll most likely need to depend on an agency like Buhv Designs to reach your marketing goals.

In-house collaboration is another option.  If you are working with an agency, make sure they have a good working relationship with the sales and operations teams.  This helps give your agency insight into how your business operates so they can create a strategy that aligns with business goals. Once your collaborators understand what you are all about, it becomes easier to build campaigns and strategies that integrate with your business model.

Next, be sure that you equip your team with the tools they need to be successful. A quality CRM can make your team far more efficient and keep everyone organized. Check out our blog post on the best CRMs for small businesses.

Setting a marketing budget is more than challenging. Identifying your business goals and how marketing can help achieve those takes time, talent and a little bit of elbow grease.  Contact Buhv Designs for help in setting up strategies and a budget that works best for your business.

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