What is the ideal budget to set aside for digital marketing?

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Every organization now relies on digital marketing. We can reach out to targeted clients who are interested in your products and services via digital marketing.

What is the most popular type of digital marketing?

Paid Advertisements

Paid adverts, such as Google Ads, are the most effective ways to promote your products and services quickly. When a specific keyword is typed into a search engine, your adverts will appear. Although it is more expensive than most other online digital marketing tactics, it is one of the most successful ways to get fast conversions.

Search Engine Optimization (SEO)

SEO is a method that is used by all websites and is necessary. SEO is comparable to advertisements in that the benefits are not immediate, but it is a long-term investment. Paid adverts alter based on a Pay Per Click module aka PPC/SEM; nonetheless, SEO results have no additional cost per click. Without paying more, you can get an unlimited number of clicks through to the search engine optimized results. Consider how much money you could save if you could receive targeted visitors to your website.

Social Media Marketing

People trust people; thus, this strategy is vital. Influencer marketing is comparable to social media marketing in that people share something fascinating about a product or service via social media posts or videos on TikTok, Instagram, YouTube, Facebook, and other platforms. You get my drift.

People will like, share, and comment on your article as a result of its use and trends on social media, providing you with useful feedback and a natural referral to your business. This is sometimes referred to as viral marketing or referral marketing. I’m sure you’ve heard about the viral post. Wouldn’t it be great if your product went viral and you profited from it?

How much money should we set aside for digital marketing in light of these considerations?

We need to know how much your products and services cost, what your margins are, and how much money you plan to make in a month, as well as your present overhead costs.

There is a straightforward method for calculating the cost of digital marketing and planning a budget for it. Let’s split these down into Overheads (a fixed cost derived from the cost of rent), Employment Wage (the total salary paid to all employees in the organization), Average Product or Service Cost, and Monthly Targeted Earnings.

Targeted earnings in a month

Normally, businesses will set aside numerous sales to cover the items stated above; these anticipated sales numbers should and must cover the cost of everything and end up with a fair profit on a month-to-month basis for the best balance sheet in the business’s financial statement.

With the rising cost of everything and the ongoing rise of industry competitors, we need to raise the cost of everything that we had planned even for the previous year.

Fixed Cost

In a month on average, fixed costs include items like your office leasing, warehouse rental, or other fixed costs of services like tax filing and audit services. Monthly fixed overheads for a decent-sized office in Singapore range between $6000 to $10,000 per month for a typical company. That is, at least, the price Sotavento Medios is paying right now.

Employee Cost

Employee cost is a factor that may be used to figure out how much digital marketing budgeting will cost. Taking the average wage of all your employees in a month and making it your marketing budget is often a straightforward approach to calculate a budget for your digital marketing efforts. Consider it as if you had another person working for you, but this employee is the most important employee in your organization, as he or she is the one who drives the business’s desired sales. In our boutique digital marketing agency in Singapore, we have a total of 7 employees, with a total monthly employee wage of $25,000. So, if you divide that by the 7 individuals in the company, the average monthly salary is around $3600. This should be the case when calculating a company’s marketing budget. If you are spending less than this amount, you should review your budget to determine whether the math is correct.

The average cost of a product or service

Another method is to calculate the average cost of your products, as well as the number of sales required to pay the costs of running a business while still making a profit. For example, if you’re selling computers and the average cost of a computer is $1500, and you make a $150 profit for each computer sold. To cover the cost of the overheads and salary like in the above would be with this formula (Total Employee cost + Fixed Overheads) +Targeted Profit / Profit Margin = Number of products required; to cover all the cost. With the example stated above we will take ($10,000 + $25,000) + $10,000 / $150 = 300 computers.

However, this strategy is not foolproof; to do this, we’ll need to sell 300 computers per month or 10 PCs per day on average. This is doable if you have a large retail location, but it will be difficult if you run an internet business or work from home, doing corporate or warehouse sales through Amazon and Lazada’s e-commerce platforms.

The most effective way for calculating the budget

This is the moment you’ve been waiting for.

We will determine the marketing budget using the following strategy, which works well for both ourselves and our customers, allowing them to earn the maximum profit possible. It’s pointless to cut corners on marketing because you’ll be limiting your growth possibilities. Consider it as if you were dining at a buffet. Why would you want to limit yourself to just one serving of food when you have the capacity to take ten? It’s a buffet, after all. Similarly, if your company’s website offers a wide range of items and services, attracting a certain customer may entail presenting them with a package of products and services.

The Math

(Fixed Cost + Total Employee Cost + Average Employee cost+ Targeted ed profits per month + tax [Singapore GST] + % of Profit Margin / Total number of Employees = Budget of Digital Marketing.


Again, in our own example: we will take the above and count as ($10,000+$25,000+$3,600+$10,000+7%+400/7) =$7,394

So, if I want to make at least $10,000 a month and cover all the costs, I will need to allocate the digital marketing budget of $7,394

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