Setting an advertising budget for your business can feel pretty overwhelming. With so many media outlets available in today’s world, you may not know where to even begin. Thankfully, you don’t have to do it alone! The team at Neon Canvas is here with your guide on how to set an advertising budget for your business.
The main reason this task can feel so daunting is that there is no one-size-fits-all approach to how you budget for marketing expenses. Every business has unique needs and there will be unique solutions to the issues that may arise along the way. That’s why your advertising budget must be tailored to those needs and your unique marketing strategy. To create a successful advertising budget, you have to start with understanding how much money to designate for advertising and how to put that money to good use.
It starts with the numbers
The math behind a successful advertising budget starts with asking yourself a few questions:
- Would traditional or digital advertising be better for my business?
- What will reach my target audience?
- How expansive do I want my reach to be?
Once you establish these basics, you can delve into the numbers! Studies show that new businesses should allocate around 12-20% of their gross income to advertising while established businesses can allocate closer to 6-12%. This is due to the need for new businesses to capture new market share and develop, while older businesses will already have some established rapport throughout the community. Businesses that have been operating for 5 years or more will likely have consistent market share and clientele they can focus their advertising budget on specific goals and campaigns rather than gaining brand recognition.
The benefits of traditional advertising
Traditional marketing methods continue to play a major role in successful advertising. These include print, broadcasting, and outdoor advertising and can be incredibly effective when used strategically. While traditional advertising can be slightly more costly than digital methods, they have unique benefits that can’t be found in the digital sphere.
Print advertising
This consists of physically printed media, like ads in local newspapers or magazines or flyers posted in your business or around the community. These give you the creative freedom to present and unique and eye-catching designs to the public and promote your business. Print media is a great option for new businesses to promote themselves to a diverse audience. The cost for print advertising will vary depending on each publication and the size of the ad you purchase.
Broadcast advertising
This includes television and radio advertising, each of which has unique benefits. Television is a great way to catch people’s attention with visual and audio elements, while the radio is effective for reaching people on the go. Each of these can be great for spreading the word about promotions or simply promoting brand awareness. Again, the cost will depend based on each provider as well as the length of your ad.
Outdoor advertising
Out of the traditional advertising mediums, this tends to be the most cost-effective. Outdoor advertising includes billboards, which provide constant promotion along major roadways. It can also include posters, ads on the sides of buses, benches, and airport signage. Outdoor mediums have an extensive reach and promote your brand 24/7.
The benefits of digital advertising
Digital marketing comes with its own unique set of advantages that serve an important role in your marketing strategy. Digital methods tend to be lower in cost, making them a great option for smaller businesses or those just getting started. Digital marketing methods also give you more control over your audience and engagement, allowing you to put your money where it matters most. Here are a few digital marketing strategies that can work for your business and your budget:
Online advertising
This term consists of many different tools, including search engine marketing, retargeting ads, targeted video ads, and display advertising. These marketing methods are effective for gaining conversions since they give you the ability to track analytics and optimize your online campaigns as they run. They are cost-effective since many of these only charge you when consumers interact with your ad. Cost will vary depending on your exact needs, but these are great ways to boost your brand awareness on a smaller scale budget.
Social media promotion
Social media is a great way to stay engaged with your audience while reaching new clients and growing your brand awareness. By posting regularly and responding to comments and tags, you can get the word out about who you are and what services you provide. Social media promotion is typically most effective when paired with other digital or traditional marketing tactics, but it plays an essential role in your marketing efforts nonetheless!
Website management and SEO
Arguably the most important aspect of your digital marketing strategy is your website. This serves as the foundation for every advertising campaign you create. It’s likely that you’ll include your website address on every form of marketing you do, including print! Once your website is established and reflects your brand, search engine optimization will help maintain your foundation and continue to grow your client base.
Building a website can be an expensive process but investing in this vital medium will help you make the most out of every advertising opportunity that arises. If you don’t have a site or your site isn’t functioning properly, this should be the first area to invest your budget.
Budget for better advertising and watch your business grow!
Budgeting isn’t always an exact science, especially when it comes to your business advertising. Our team at Neon Canvas will help you understand how to set an advertising budget for your business in a way that leads to growth you can see. If you’re ready to get connected with our team or want to start your free digital content audit, click here. Let’s start the new year off strong together!