How to Plan Your Online Marketing Budget for 2019

2018/11/19 08:00

budget digital marketing

Wondering what you should be spending on digital marketing next year? This is what you need to know.

2017 was the first year that digital marketing actually surpassed TV in terms of spend. While digital advertising made up 41% of total marketing spend in 2017, TV dropped down to 35%.

The reality is that consumers spend more time online than ever before and with the rise of platforms such as Netflix, they have even more reason to open a browser instead of flip through TV channels.

Unlike traditional media such as TV, online advertising gives brands the opportunity to reach a targeted audience. And because they’re able to track the results of their campaigns, it’s easier to increase their ROIs too.

Where are brands spending their digital marketing budget?

According to reports by eMarketer and Forrester, the average business allocated around 42% of their total marketing budget to digital marketing in 2018, with most of their budget being spent on search engine marketing. Display advertising received the second largest portion of total online advertising spend.

The report also showed that video content would see the most growth between now and 2021 and social media advertising spend would continue to see steady growth too. In fact, it is expected to make up around 25% of total digital marketing spend going forward.

Another report by Hanapin Marketing showed similar results. Brands were expected to increase their Google Ads budget before anything else, followed by social media and video.

budget digital marketing

How much are brands spending across different platforms?

How users spend their time online and make decisions and purchases plays a leading role in how brands are spending their online marketing budgets.

Google processes over 40,000 search queries every second, which amounts to billions of searches every day. The fact that consumers rely on search engines more than ever explains why search marketing is still receiving the largest portion of most digital budgets.

When setting a digital marketing budget, businesses are not only looking at trends but the online activity of their specific audiences too.

To get a better idea of what the average business is spending across different areas of online marketing, let’s take a look at a graph from a report by Forrester.

Marketing Spending

What’s clear is that digital marketing spend is increasing every year but brands are still splitting their budgets up in a similar way.

Setting your 2019 budget

There is no exact answer as to how big or small your online marketing budget should be simply because your brand’s specific goals, your overall company budget and your target audience are very closely linked to this answer.

Here are a few things to consider as you develop your digital marketing budget for 2019:


  • Your Annual Revenue & Budget

Marketing is what’s going to drive revenue, which means that a portion of your annual budget will need to be allocated to these types of activities. Research shows that most businesses allocated around 11% of their total budgets to marketing in 2018, with brands in the B2C product space spending the most.

Your annual revenue can also be used to determine how much of your budget should be spent on marketing.  The U.S. Small Business Administration recommends spending between 7% and 8% of gross revenue on marketing if your sales don’t amount to more than $5 million per year and your net profit margin isn’t larger than 12% after all expenses.


  • Lifetime Customer Value

Knowing what your customers are worth also makes a difference to how much you should spend on digital advertising.

The higher your customer lifetime value, the more you should be spending on marketing. Businesses that sell a lot of smaller ticket items will find it more difficult to set a digital marketing budget because it’s hard to market at a low rate.


  • Conversion Processes

It’s important to know exactly how you are converting leads into customers and the journey that they follow if you want to know where you should be spending your marketing budget.

Go through the different journeys that a customer might take to get to your website. Where are most of your conversions coming from and which processes can be optimised and improved?

Once you have a sound idea of how you will be capturing and converting leads, where you should be focusing your digital marketing efforts becomes a lot clearer.


  • Cost per Acquisition

What it costs to bring a visitor to your website in order to get them to convert is another great way to make decisions about your 2019 spend.

You can calculate your cost per acquisition (CPA) by taking the cost of bringing visitors to your site divided by your conversion rate. Your CPA should always be less than the lifetime value of your customer.


  • Cost per Click

If you are planning to market on platforms such as Facebook and Google AdWords, knowing what the average cost per clicks are on each of those platforms can also help you navigate your 2019 advertising spend.

Here are some of the recent averages:

  • Google Search: $2.32
  • Google Display Network: $0.58
  • Facebook: $0.27
  • Twitter: $0.36


Once you have an understanding of what your leads are worth, you will need to determine whether you can get a good enough conversion rate at the right price.

While you may want to be on multiple platforms and trying out several different digital marketing tactics, it’s best to start off slow and steady regardless of the size of your budget. Using one or two platforms really well is better than trying to spread your brand thin around several of them.

Taking a slower approach to digital marketing will give you the opportunity to track and optimise your efforts, making it easier to set your annual budget going forward.