What % of revenue you spend on advertising for your online business?
I am new to selling online. If you own an online business, what % of income (from this online business) you would be using for online marketing? Is there a normal range — say 20-40% to keep the business running, and more than 80% to grow the business more aggressively?
2 Responses
Claudiomar
04 Mar 2010
leesmith2
04 Mar 2010
Given each business has different objectives, products, and markets, there are no hard-and-fast rules about establishing the size of an online advertising budget.
Our experience states that it is best to start out small (perhaps a few hundred dollars per month) – measuring performance objectives (which may be site visits, inquiries, RFP invitations, sales, etc.) so you know what you’re getting. If the program works, then ramp it up – still measuring along the way. You can continue to expand your advertising budget by trying additional channels, approaches, etc.
You’d be surprised how much money is spent online with no sense of ROI.
If you can’t measure your online advertising efforts then don’t spend the money until you can.
Hi Teddy,
I don’t like very much the approach of focusing in "how much" before having a very good idea about "what", "to whom", "how", and "why".
The way I like doing this is:
1) I think about the target market (who do I want to send the message to?)
2) I think about ways to reach the target marketing: the media they use, the language they like, the keywords they use, etc.
Once I’ve defined the target public and the product, I can think about message options (what to say and how to say it). Each message option has its own cost and limitations and that is the point where I start thinking about budget.
As you see, each marketing action has its own cost and it doesn’t have much to do with your income. This situation is even worse at the very beginning when your income is expected to be lower.