How to Determine  Your Digital Marketing Budget

Laurence Williams   |    June 28, 2021


It’s a question we see a lot:

What percentage of our sales should we, as an  ecommerce company, spend on marketing?

The Balancing Act

Marketing budgets are tricky: either you spend too much and put yourself in a bad cash flow position, or you spend too little and no one even knows your products exist.

The Simple  Answer

7-12% of sales is recommended and should be sustainable for marketing your business, but there are instances where you may need to spend up to 30% of your total revenue on marketing.

You also need to split your marketing spend between brand development costs (your website, blogs) and the costs of promoting business (campaigns, events). There are 3 big questions to answer.  ->

1. Where is your audience?

Different people exist on different parts of the web, and they change platforms often. Learn where your audience is and where they’re most likely to respond to marketing.

2. What are  your goals?

Are you trying to hit your sales quota, a customer acquisition goal or generate a certain number of leads? Each goal requires its own strategy.

3. How much can you spend to gain a customer?

When investing in your marketing efforts, you should know how much you are willing (and able) to spend on acquiring a new customer.

Choosing  Channels

Once you’ve determined a total marketing budget, you need to break it down into channels. Even ecommerce businesses should diversify so that they don’t purely exist online or on one channel.


- Paid Search - Direct Mail - SEO - Referrals - Affiliate Marketing - Email - Content Marketing - Social Media - Product Listing Ads On average, ecommerce brands spend 10-24% of their budget on SEO and 29-57% on PPC.

Still, many factors impact spend:

- Competitive activity - Aggressive growth - Timing - Customer experience - Industry

Marketing Expenses Fluctuate

Whether it’s because of the seasonality of the product you offer or your competition changing their strategy, you might have had a bad quarter or a great one.