How to allocate budget for digital marketing – with template

The budget is the fuel for marketing initiatives. Learn what factors you need to consider while defining the digital marketing budget.


No sales, no customers! That sums up the importance of allocating a definite budget for digital marketing today. As per Gartner(1), marketing budgets were up to 9.5% of the company's revenue, 56% of which was digital.  For small to medium-sized organizations(2), the cost of digital marketing services in 2022 could cost anything between $2500 and $12,000.


In this blog, you will get an idea about how to allocate digital marketing budget and strategies for deciding the budget. Here is one survey that shows budget allocation across marketing programs.



Image Source: Web Strategies

Factors to consider while deciding the digital marketing budget 

  • Software

    Typically, you would require tools for marketing automation, content creation, graphic design, analytics, media planning and buying, etc. They come with a subscription fee, which you need to cater for in the overall budget.

  • Personnel

    Digital marketing requires a full-time, dedicated team to strategize and implement the marketing campaigns. This includes a marketing manager, content writers, designers, marketing automation experts, SEO experts, and subject matter experts. If you hire an agency, most of these jobs will be taken care of by them, but you will still need a marketing manager to act as a bridge between the company and the agency.

  • Video production 

    Video is one of the most impactful content types. Making and publishing videos will do good for your content marketing initiatives. It can be created using software, like animation, or it could involve live production. In either case, it's an important aspect of the budget.


  • Content creation

    Digital marketing demands the consistent generation of fresh and interesting content. This means, in the overall budget, you need to consider the cost of hiring a content writer (freelancer or full-time), image licenses, tool subscriptions, research, etc. Alternatively, you can hire an agency for content creation and pay the agency fee.


  • Paid social 

    Paid campaigns on social media help meet brand awareness and lead generation goals. Expenditure on these paid campaigns depends on which platform you are using for the campaign, how many audiences you are targeting, and for how long. Also, plan for the sudden opportunities where paid campaigns will be required.


  • Paid search 

    This is another important strategy that consumes the digital marketing budget. It helps to get your results on the top of the search engine page.


  • New strategy experimentation 
    As the strategies and technologies keep getting updated, there will be new marketing strategies that you can experiment with. This will be a small percentage of the budget, but it is a must-have.


  • Hiring an agency 

    Most companies do not have the bandwidth and the resources to carry out all the marketing activities in-house, so they hire an agency. In that case, you may not need to pay individually for all the human resources, or the tools mentioned above, but there will be an agency fee to pay, plus the cost of paid campaigns.


Some effective budget allocation strategies 

Here are a few methods of allocating a budget. You could choose one that best suits the work of your organization.


  • Revenue-based
    As per this method, a marketing budget is set as a certain percentage of the company's revenue. Gartner(3) has reported marketing budgets to be 9.5% of company revenue, out of which digital marketing accounts for 56%. 
  • Competition-based 

    You can find out how much your competitor spends on marketing and use that information to make your own plan for how to spend your money.


  • Top-down

    Here, the top management decides on a budget based on various business decisions. The marketing team is allocated a certain budget and they have to work within that.

  • Goal-based 

    As the name suggests, the budget is goal-driven. A specific budget is set aside for each goal. For example, the budget is separately set aside for paid campaigns; social media marketing; brand reputation-building campaigns; lead generation; etc.


As budgeting requires a broad perspective so that every aspect is covered and spending is closely monitored, a template can help get the efforts on track. We have put together a digital marketing budget planning template for you, which includes various areas that need funding and a way to ensure that you don’t overspend or underspend.


How Ethosh can help businesses achieve their digital marketing goals, within budget?

Ethosh has helped many start-ups and Fortune 100 brands experience the digital revolution. Partner with Ethosh to develop a 360-degree digital marketing solution tailored to meet your needs. From creating compelling content for your audiences to planning and executing winning campaigns, Ethosh can bring together a program that will build customer confidence and trust at every stage of the buyer's journey and quickly turn new customers into brand advocates. We deliver at scale, in speed, and at a cost advantage that helps you stand apart from your competitors.

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