“What percentage of our marketing budget should we be spending in the digital arena?”
At knoodle, we are constantly researching the clients and potential clients of the businesses that engage our services. The answer to the above question depends on the age and lifestyle of the clients or customers the business is trying to attract.
We do a media profile of each client and look at their media habits which include online and traditional avenues. We then coordinate the media plan with the habits of those we are trying to reach. We find tools from Scarborough Research helpful and pay special attention to the media viewing quintiles. This allows us to measure the potential clients / customers against the market to determine what is most efficient for the budget.
But I also wanted to look for other sources of information too, because digital isn’t just a media vehicle, it’s a conversation and a tool for additional research, A-B testing, customer service and a satisfying experience. It’s also a source of metrics and analytics which makes the practice of marketing less nebulous.
According to both the America’s Small Business (SCORE) and the U.S. Small Business Administration, a proper marketing budget from companies with revenues between $1-10 million should be 7 to 8 percent of sales. According to a survey, most companies are putting between ten and fifty percent of their budget into digital activities.
While the CMO (Chief Marketing Officers) Council has predicted that global media spending is set to increase 5.1% during the next five years. They also forecast a 16.1% increase in digital during that time. Within the digital space, it is interesting to note that mobile has overtaken desktop usage- which is picking up more of the digital dollars.
And while these facts, figures and media profiles are important, we can’t overlook the importance of the message. Rob Snyder, knoodle Senior Strategist makes this point, “There is no set rule. No laws of media,” he said. “ The reality is a smart media mix depends on the message. The creative. The content. And the overall brand strategy. It would be easy to say demographics are the determining factor because demographics certainly are a consideration.”
Snyder added, “People who are like minded are the audience for any product or service. They can be 8 or 80 which means they don’t necessarily fit into a neatly packed group”.
Jody DeSimone, knoodle Digital Director, believes that the digital percentage should be a minimum of 30%. “Digital is necessary and complimentary of all other marketing goals,” she said. “I have worked on national brand accounts that spend upwards of 75% of their budget on digital.” According to DeSimone, the trend is moving in the direction of higher spends