When it comes to digital marketing, small businesses are often strapped for cash. Many owners are unsure where to allocate their marketing budget to see the best results.
So, we surveyed 100 small business owners about their digital marketing budgets, and here’s what we found.
1. Not Enough Budget
Only 38% of small businesses surveyed allocate more than 5% of their budget to digital marketing, with the most common budget allocation being between 1-5%.
According to the Small Business Administration, small businesses (businesses with revenue less than 5 million) allocate between 7% and 8% of total revenue to marketing. Anything less is not enough to sustain even a basic digital marketing campaign. To see results from digital marketing, small businesses need to be willing to invest both time and money into the effort.
2. Lack of Understanding
Of the small businesses surveyed, only 42 owners are confident in their understanding of digital marketing.
This lack of understanding can lead to small business owners making poor decisions about budgeting for and executing a digital marketing strategy.
Which Channels to Spend on?
Search Engine Optimization – Only 24 respondents said they allocated a budget to SEO, with 8% of the total marketing budget being the average.
Social Media – 34% of respondents said they allocated a budget to social media with an average of 9% of the total marketing budget.
Content Marketing – Only 16% of respondents said they allocated a budget to content marketing, with an average of 4% of the total marketing budget.
3. It’s Not a Priority
This one definitely surprised us. We expected that most small business owners would understand the importance of digital marketing and make it a priority for their business.
However, only 33% of those surveyed said that digital marketing was a top priority for their business, with the majority (67%) saying it was either not a priority or they didn’t know.
This could be for several reasons. Perhaps some small business owners feel they don’t need to invest in digital marketing because they’re already getting customers through word-of-mouth or traditional marketing methods.
Or maybe they just don’t have the money to invest, which leads us to our next finding…
4. Money is Tight
COVID-19 has had a devastating effect on small businesses, with many owners fearing they won’t be able to survive the pandemic. It’s no surprise, then, that money is tight for many small business owners.
In fact, 56% of those surveyed said that lack of funding was the main reason they weren’t investing more in digital marketing. This was followed by lack of time (39%) and lack of understanding (37%).
But what if the pandemic was the perfect time to up your budget?
Stay with us on this one.
We know that most small businesses are cutting costs right now, but hear us out.
The pandemic has forced many consumers to stay home and rely on online shopping for their needs. This shift in consumer behavior will continue after the pandemic is over, which means that small businesses need to be visible online now more than ever.
The chart below from trade.gov shows a significant increase in worldwide retail sales from 2019 through 2020, giving a robust boost to a consistent 8% growth in global eCommerce sales over the next eight years. This demonstrates that online retail purchases are on the rise due to COVID disruptions’ impact on the industry.
By investing in digital marketing, small businesses can ensure that they’re visible to consumers searching for their products or services online.
5. They Tried it But Didn’t See Results
This one aggravates us because it’s so preventable.
We always tell small business owners that digital marketing is not a quick fix. It takes time to see results, especially if you’re starting from scratch.
But many small business owners expect immediate results and give up when they don’t see them right away. In fact, 22% of those surveyed said they had tried digital marketing but didn’t see results, so they stopped.
The key to success with digital marketing is consistency and persistence. You need to commit to the long game and stick with it, even when you don’t see results right away.
If you give up too soon, you’ll never see the full potential of what digital marketing can do for your small business.
In light of this, we’ve compiled a comprehensive resource that outlines effective, long-term strategies for SMBs in the digital space. If you’re committed to the long haul and ready to see what digital marketing can really do for your business, dive into our guide on Digital Marketing Strategies for SMBs.
It’s also possible that their marketing agency didn’t know what they were doing, which leads us to our next finding…
6. They Didn’t Vet Their Agency
Hiring a digital marketing agency is a big decision, and it’s one that should be made carefully.
You need to make sure you’re hiring an agency that has experience working with small businesses in your industry and that you can trust to spend your hard-earned money wisely.
Unfortunately, many small business owners don’t take the time to vet their agency and regret it later. In fact, 33% of those surveyed said they had hired a digital marketing agency but were not happy with the results.
You should also have a clear idea of your goals and objectives before you start working with an agency to hold them accountable for results.
7. They Don’t Have a Plan
One of the biggest mistakes small business owners make with digital marketing is not having a plan.
They might throw some money at Facebook ads and call it a day, but without a strategic plan in place, they’re not going to see the results they want. In fact, only 19% of those surveyed said they had a written digital marketing plan.
A digital marketing plan doesn’t need to be complicated. It can be as simple as setting some goals and objectives and outlining the tactics you’ll use to achieve them. But without a plan, it’s easy to get off track and waste time and money on marketing activities that don’t produce results.
8. They Don’t Measure Results
Measuring results is essential to any digital marketing effort, but many small business owners don’t do it. In fact, only 21% of those surveyed said they regularly measure the results of their digital marketing efforts.
The good news is that measuring results is easier than ever before, thanks to technology. You can use several tools to track your website traffic, brand mentions, social media engagement, and even sales.
But if you’re not measuring your results, you won’t know what’s working and what’s not. And without that information, it’s impossible to make adjustments to improve your results.
9. They’re Not Willing to Invest
Investing in digital marketing is essential for any small business that wants to compete online. But many small business owners are reluctant to invest in marketing, thinking it’s too expensive or they can’t afford it.
In fact, only 17% of those surveyed said they were willing to invest $500 or more per month in digital marketing.
You need to spend money to make money, and if you’re not willing to invest in digital marketing, you’re not going to see the results you want.
Digital marketing is an essential part of any small business’s marketing strategy. If you’re not incorporating it into your plan, you’re missing out on a huge opportunity to reach and engage your target audience.
Don’t make the mistake of thinking digital marketing is too expensive or that you don’t have the time for it. With a bit of planning and effort, you can see amazing results.
10. They Do Their Own Digital Marketing
This one isn’t necessarily bad, but we were surprised by how many small business owners said they do their own digital marketing.
In fact, 42% of those surveyed said they handle their own digital marketing, with only 23% saying they have someone on staff who handles it.
There’s nothing wrong with doing your own digital marketing, but it’s important to realize that it’s a full-time job. If you’re already stretched thin, you might not have the time to do it yourself.
And if you’re not an experienced marketer, you might not know how to use digital marketing to its full potential. In that case, it might be worth hiring someone to help you out.
That’s where we come in. We’re a digital marketing agency specializing in helping small businesses succeed online. We can help you create and implement a digital marketing plan that gets results.
Contact us today to learn more about our services and how we can help you grow your business.