How Much Does Advertising Cost for Small Business- As a small business owner, you have a million things on your ‘to do’ list to keep your business going. One of the most important aspects of a small business to focus on is advertising. After all, how do you get people to know about your business? You need a strong presence in the marketplace and one way you can achieve this is through creating awareness about your products and services. Your advertising budget is one of the major factors that will determine how successful your marketing efforts are, so it is crucial for you to figure out how much does advertising cost for small businesses.
What are the average advertising costs for small businesses? Advertising costs vary greatly depending on location, your target audience, your placement route, the number of ads you run at once, and many other factors. But I’ll break down what it might cost to advertise your business.
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The 5% Rule
To understand the recommendation, first, let’s define ‘marketing budget.’ Your marketing budget refers to all costs for marketing, advertising, public relations, promotions and anything else you might blanket under that very wide-cast net called ‘marketing’ on a day-to-day basis: for example, Google AdWords, social media, print ads, sponsorships, collateral and even tastings.
As you’ll see below, the ideal budget depends on your current marketing foundations. BUT, as a general rule based on the latest research, expert opinions and years of marketing experience, we say:
You should spend 2–5% of your sales revenue on marketing.
The U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing and advertising if you’re doing less than $5 million a year in sales and your net profit margin—after all expenses—is in the 10 percent to 12 percent range.
Content Search Engine Optimization (SEO)
Approximately from 600 to 5000 dollars a month. This price includes keyword research to create an SEO core, content optimization, link building, etc. – Everything that increases the ranking of your site in the search results of Google and other search engines. This is useful because the higher your search engine ranking, the more potential customers will see your business.
Estimated cost, since the network has many marketing agencies, each of which has its own way of determining the price of SEO services. Typically, the price of such services depends on several variables, including:
- The number of pages and copies of the site (several languages).
- The number of keywords (word forms) to be targeted.
- Initial conditions and industry competitiveness.
In addition, cost also depends on the optimization approach. So, there are gray approaches when creating a link mass on “spam” low-quality sites, which is relatively inexpensive, but can lead to fines or a ban in search engines. And there are strategies for creating link mass using high-quality content, which may take several thousand dollars a month and from 3 to 6 months of real time.
Content − marketing (texts, photos, videos)
From 1,500 to 10,000 dollars a month. It includes researching the target audience, developing a content plan, creating content, distributing and promoting it, and creating links. The content can be text, photos, videos, images, infographics, graphics, gifs, memes and more. All this provides a constant influx of users through organic traffic, even without ads.
The cost of developing content depends on the complexity of the topic (industry), the amount of content needed, the format and level of expertise, as well as who creates it:
- Marketing agencies. Outsourcing companies engaged in marketing at a professional level. Usually they provide comprehensive services and work on a long-term contractual basis. Quality is average or higher.
- Internal team (or employee). A good option if you have a lot of regular work, and not very profitable if you need several texts or videos per week (month). Quality depends on the particular artist.
- Individual artists to hire on sites such as Upwork, Fiverr, and Toptal. Usually the price of their hiring is the hourly rate or the cost of a typical project. The quality depends on the particular artist: it can be very good or very bad.
Social Media Marketing (SMM)
Approximately 200 to 10 thousand dollars. The price may include the creation of posts (texts, photos, videos), targeting, launching advertising campaigns, communication with customers and more. The price depends on the complexity and quantity of content, as well as on the social network: according to The Manifest, “Facebook (86%) is the most popular social media channel that small businesses use to advertise their business, followed by YouTube (51%), Instagram (47%) and Twitter (41%)”.
And according to a Criteo survey, users also point to Facebook as the main channel for searching for products and companies (49%), followed by Instagram (27%), Pinterest (22%), Twitter (14%) and Snapchat (12%). But, users prefer to make purchases outside of social networks: the: SUMO Heavy survey showed that only every fifth (18%) makes purchases directly through social networks.
As with content marketing, marketing agencies, employees of your company, or freelancers can engage in SMM. At the same time, small businesses prefer agencies, since there is no guarantee of quality, and this is economically feasible. Less often they hire freelancers who run several SMM projects, and almost no one hires an SMM box on staff.
Mobile Ads
Approximately from 500 to 10 thousand dollars. This is a relatively new channel of digital marketing, which already brings big profits (often more than traditional methods of monetization). At the same time, such advertising is not very annoying for people: according to the IAB report, mobile ad spending grew 40% year over year, while desktop spending is flat or down.
Source of the image
But the main advantage of advertising in mobile applications is that it cannot be disabled using ad blockers. Advertising will either turn off itself after the integration is completed or the user will be able to turn it off 5-10 seconds after the start of the show. In addition, advertising in a mobile application can be made interactive, which increases user engagement and, consequently, increases its conversion.
Pay-per-click advertising (PPC)
Approximately from 1 to 50 thousand dollars a month. It’s about pay-per-click advertising on Google, Facebook, Amazon, and any other web platform. This is still the fastest and easiest way to increase traffic, the number of subscribers, views and sales. And such advertising can usually be targeted by a variety of socio-demographic parameters – from gender to location on a particular street.
The cost of a PPC campaign depends on the following factors:
- How many keywords you want to target.
- The cost of creating texts, banners, videos for advertising.
- How much do you want to spend per month on an advertising campaign.
- The number of platforms where you want to run ads.
- Will you use Google Shopping Management.
- Audience location and delivery time.
- Niche competitiveness.
Partnership programs
Approximately from a few hundred dollars to 50% of income. An excellent marketing channel for small businesses, as it involves payment for the desired action, and not for showing or clicking (following the link). The specific cost depends on the calculation method:
- Percentage of sale. For example, 10% of each purchase or 50% of the commission received from the client in a certain period (for example, six months) or for the entire time that he uses the service. Usually this method is used wherever the target action is the purchase and sale of goods, subscription or accompanying a financial transaction (for example, issuing a loan).
- Paying a certain amount of money for a certain action. For example, $ 100 for each sale, $ 5 for each subscriber, or 10 cents for every like. Typically, this method of calculation is used where the target action cannot be measured financially, for example, following a link, opening a web page, viewing ads, etc.
Conclusion
A small business owner’s advertising budget is one of the biggest decisions you will make. Statistics show that small businesses are often more productive when they advertise on a monthly basis. Deciding how much to spend each month for your small business is tough, but it can be done.