The global digital marketing industry is projected to reach $786.2 billion by 2026. The US market alone accounts for $460 billion. Digital marketing budgets saw a 14% increase between 2020 and 2021.
According to the “2022 Gartner CMO Spend Study,” the average marketing expenditure increased from 6.4% in 2021 to 9.5% in 2022, with businesses allocating 56% of marketing budgets to online and digital channels combined.
Today, small businesses are frequently struggling to find a balance between effective marketing strategies and allocating the right marketing budget. Currently, there are 33.2 million small businesses across the US, up from 32.5 million in 2021, making up 99.9% of all businesses across the country.
But small business closures have been rapid too, with 843,229 closings compared to 909,808 openings between March 2019 and 2020. Many business owners lack the knowledge and skills to employ digital marketing strategies effectively, resulting in inconsistent and inefficient marketing efforts. Small business budgets for marketing may fall short of what is needed to gain visibility and market share.
Smal-l to medium-sized businesses (SMBs) in the US struggle with marketing, leading to high volatility and many closures. SMB owners must find their most effective channels for rapid growth by setting realistic expectations and targeting channels that will generate sales for them.
In the US, social media marketing is valued at $94 billion in 2023, with an annual average growth rate of 18.2% per year between 2018 and 2023.
The Small Business Administration (SBA) suggests allocating 7-8% of revenue toward social media advertising. Therefore, with an annual revenue of $1 million, the social media advertising expenses should range from $70,000 to $80,000 per year or approximately $6,000 per month.
Effective marketing calls for an investment. A well-planned marketing budget is crucial for any business to stay competitive and achieve success. It not only informs and guides the marketing strategy, but also helps businesses keep track of results, and optimize their efforts. By prioritizing strategies within a budget and setting specific KPIs, SMBs may effectively drive the best ROI.
Derek Chew is CEO of Fullmoon Digital, a 100% independent digital marketing agency. His team is cross-functional with deep experience in SEO, digital strategy, programmatic, analytics, performance marketing, paid media, social advertising and creative.
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