How Much Should You Spend on Digital Marketing in 2023: Series Two

A Day In The Life of A Digital Marketer: How Much Should You Spend on Digital Marketing in 2023?

At the outset of this discussion, I would like to pose a question. Suppose an App development company creates an average app for $10000 and invests $100 in digital marketing, yet only manages to acquire one client. In other words, the contract is not worth more than $10000. On the face of it, this sounds like a success.?

However, a successful digital marketing team will strive to find ways to achieve better results with the same budget.

To put it more simply, obtaining one client is a significant accomplishment for the marketing team, and if the client is well-nurtured, more referrals will follow. However, if the company owes $500,000 at a certain time and the management is looking to maximize results even with the limited marketing budget, what appears to be progress from the marketing team's perspective may not be progress in the CEO's eyes.

In such a situation, a success-oriented digital marketing team should be able to suggest areas for pivoting and identify ways to make prospects respond quickly to campaigns. Additionally, the lessons learned from each campaign should be taken into account and adjustments are meant to be made to achieve better outcomes. However, a limited marketing budget will still restrict reach and revenue, even with the best marketing teams.?

The Average Order Value (AOV) is an important factor to consider when budgeting for digital marketing, as it can help to determine whether or not the campaign is delivering the desired results. The AOV is the average price paid for a product or service by an individual customer.

For example, if an advertisement costs $100 per month and one client pays $200 for a product, the AOV for that is $200. Although this may not be a great outcome, it should motivate the team to double their marketing spend or to use the same amount leveraging a more effective strategy.?

In order to maximize revenue, it is recommended to allocate more resources to services or products with a higher Average Order Value (AOV). All legitimate activities that contribute to the development and sustainability of the business should be supported.?

It is beneficial to market all of your products in an appropriate manner, however, it is important to be deliberate in targeting the more profitable areas of your offerings. If you are able to increase your revenue with a product with a high Average Order Value (AOV), it is recommended to allocate more resources to the promotion of that product or service.

Additionally, proper lead nurturing should be implemented to maximize the number of leads generated. Despite this, it is still possible for the $100 referred to above to result in additional revenue of $500 or greater if the leads are properly monitored and nurtured. It is widely accepted that if the customer service or sales team is able to follow up with qualified leads, there is a greater likelihood of increased revenue.

Nurturing leads can result in a 50% increase in sales at a 33% decrease in cost, according to Hubspot, a marketing and CRM giant. Furthermore, according to the Demand Gen Report, lead nurturing can lead to a 20% increase in sales opportunities for a business.