The B2B sales cycle is longer by nature. High-dollar products and services cause buyers to take more time to decide whether to invest. Meanwhile, B2C has a much shorter path from awareness to purchase. The buyer’s intent is to fulfill an immediate need.

Smaller businesses in these spaces can use this as an opportunity to build highly targeted advertising and marketing campaigns. But before this happens, the question becomes, how much should they allocate towards these budgets?

Too little, and you may not see results. Even worse, by spending too much, the business wastes valuable resources.

So let’s look at what’s realistic for small business marketing budgets.

Marketing Budgets for Small Businesses

In a Clutch survey covering small business spending, over half of them didn’t have a marketing budget. It was considered by most to be a low priority, especially in the beginning. Many companies and startups may skip creating a formal document because it’s too much to keep up with.

But as they grow, these smaller businesses are more likely to create an official, structured budget.

As the creative engine behind KEYLAY Design, Kyle Strahl advises clients on this exact topic. “To hit your advertising goals, I would say 10-20% of your previous year’s gross revenue should be set aside for your budget. This, of course, is dependent on how saturated and competitive your market is.” he goes on to say, “10% is extremely low for a marketing and design budget. But it’s a springboard for a startup [or small business] that hasn’t begun to generate a substantial revenue yet.”

When it comes to the actual numbers, most companies in these categories spend a lot less. On average, only 1%-4% of revenue is spent on advertising and marketing. For small B2B and B2C companies and startups, this amount may not be enough to spread across multiple channels.

Which Tactics are Small Businesses Investing In?

Whether it’s digital marketing, traditional advertising, or a combination of both, businesses are using every tool in their arsenal to win over customers.

Here are the most common creative outlets they’re spending money on:

Owned Online Media

• – Landing pages – These are pages built for conversions. When done right, landing pages can generate leads or move customers closer to a sale.
• – Mobile Apps – Depending on the type of app, businesses can use them to build awareness and engage with their audience. And in the case of mobile games and subscriptions, they serve as a consistent revenue stream.
• – Websites – This is one of the most important pieces of digital real estate you can own. It’s a 24/7 sales and marketing tool for customers to learn about and interact with your business.
• – Newsletters & Email – Email marketing is still a powerful form of outreach to engage with customers using targeted messaging and offers.
• – Video Marketing – Video has become one of the main forms of media people consume to get information about a company before buying. 87% of marketers report videos having a positive ROI on their business goals.
• – Podcasts – One of the more recent mediums to gain popularity over the past few years, podcasts are a great way to reach a broader audience, build authority, and show expertise.

Social Media Content

• – Graphics – Header and post images have to fight hard to make people stop scrolling on social media. A good design will not only achieve this but help build brand awareness.
• – Video Graphics – Video production quality varies, but one thing is certain, great visuals will hold people’s attention and keep their eyes glued to the screen.
• – Infographics – These are a unique way to share stats and figures using bite-sized text and images to give your audience insight into the fundamentals of your business.
• – Social Media Ads – Should you decide to spend money on ad campaigns, you’ll need to also include copy and images that cause viewers to click through.

Traditional Media

• – Billboards – By 2027, outdoor media is set to reach $53.3 billion, which shows how much businesses still value this form of marketing.
• – Direct Mail – Over the past few decades, direct mail has witnessed a decline, but it’s not dead yet. It accounts for the largest part of US advertising spending in local markets.
• – Magazine Ads & Brochures – Traditional print is still alive and well, with B2B companies investing in marketing materials explaining their products and services.
• – TV & Radio – From the Super Bowl to well-placed adverts in our favorite shows, radio and TV are mediums businesses use to generate buzz around products and services.

In-house vs. Outsourced

Many new business owners and startups try to take on everything themselves.
As Kyle recommends, “It may be tempting to save money and do it yourself. However, a few well-crafted ads with a cohesive brand and engaging content is going to get better results and revenue than a dozen “free” DIY ads. Especially if they miss the mark and fail to connect your customers with your product and brand.”

Letting go of the reins and bringing in professionals allows you to take yourself out of the execution of the tactics and instead channel energy into your company’s marketing strategy.

Setting Realistic Goals for the Business

When you’re working with a smaller budget, “quality over quantity is key,” according to Kyle. So be realistic with your business goals. What is the urgent need right now and for the future?
Here are a few thought-starters for some of the most common goals businesses set:

• – Increasing the amount of website traffic
• – Getting a certain number of sales within a specific timeframe/season/quarter
• – Attracting new customers for a new product
• – Specific conversion goals (sign-ups, downloads, calls, etc.)

Don’t spread yourself too thin by doing too many things at once. If your budget only allows for one big campaign, focus on making it the best.

Conclusion

As your marketing and sales goals evolve, so will the budget. When looking for places to allocate your marketing budget, make sure you’re investing in creative tactics and campaigns as well as professionals who can help you hit your targets.