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The costs and returns of Digital Marketing.

Nowadays, with the internet at our fingertips, business found themselves in front of a whole new world of possibilities and opportunities. Suddenly the potential for expanding their activities has grown at massive scale. Customers are no longer bound by geographical constraints, and they can be reached by anyone who desires this. But this new array of opportunities also gave birth to a more fierce competition. Is this fierce competition that made Digital marketing a necessity in our times and not an optional thing.

Why Digital Marketing?

Whether you’re a small business or a medium-sized company, digital marketing techniques are among the most cost-effective when it comes to reaching and interacting with your audience. Think of it like this: If your business is selling products for young people in a certain city, what would be your best way of communicating with them?

A traditional approach with a radio spot or a TV ad will definitely require a big budget and will offer you exposure to virtually everyone. However, if you choose to go with a digital approach, you can create tailored content for your audience and distribute it on various online media, from Facebook to Instagram, YouTube, and many others, with a much smaller budget.

On top of this, with Digital Marketing techniques you can track almost any kind of KPIs, and you also have the possibility of interacting in real time with your audience. Needless to say, this is a huge advantage for you as a brand to get closer to your customers and potential customers.


So, if you’re a small or medium company it’s much more efficient to use Digital Marketing to increase your sales or brand exposure, as it allows you to track the returns. There are different ways of measuring the returns gained, based on the type of platform and on personal approaches, with many of the larger companies having their own formulas.

For example, when it comes to Google AdWords, and the common way is to calculate the ROI, which is the revenue obtained minus the invested sum, devised by the cost.

If you made 1000$ from selling products with Google AdWords, and the cost of the ads was $500, your return is 100%.

(1000$-500)/500= 1=100%

Depending on the industry the ROI can vary. According to a study made by WordStream, the average when it comes to Google AdWords, regardless of the industry is around 2.45, which means that for every dollar spent, the return was $2.45.

Google AdWords is just one method of the Digital Marketing that requires money to bring you money. So, how do you determine how you big your digital marketing budget should be?

If you’re thinking that your instinct or guesses are good enough you’re wrong. A lot of business managers go with their feelings and come up with a figure number, that they are willing to spend on Digital Marketing, and think that the amount they’ve decided upon will do the trick. Unsurprisingly enough, this strategy doesn’t pay off, as the whole process is actually backward.

There are quite a few factors that you need to consider when it comes to establishing a digital marketing budget:

What do you want?

In marketing, you can’t really cut corners and find easy ways. You get what you pay, but first, you gotta know what you want. You out of all people know your business best. So if you know what you want for your business, the marketing efforts can be aligned with your plans and act as a springboard.

For instance, if you want to expand your activities in a new region, the marketing efforts can be focused on awareness, but if you want to consolidate your business, a wise marketing approach would focus on a rewarding campaign to increase the loyalty of your customers. Knowing what you want is quintessential to making sure that your marketing activities work for your vision and not against it.

What do you need?

Your vision is part an important part of the medium to long-term plans, but your needs are a little bit more urgent, as they are bound to the present state of your company. To accurately identify them, you must work together with communication experts and explain your pain points along with the specifics of your business. Once the pain points of your business are known, the marketing team can come up with propositions that will solve your problems.

How dynamic is the industry?

Or in other words, what is your position in the industry and what’s your competition doing. So far we have talked about internal elements in the establishing the ROI of Digital Marketing, but it’s high time we address the external factors as well. Competition along with your market share, play a key role in determining how much should your digital marketing efforts cost. In a nutshell, the more competitors you have, the pressure on your business increases driving your marketing costs up.

As a wrap-up, we all want more clients, increased sales and profits, but to achieve that you need a coherent strategy. Marketing should be integrated as a key component and not just for the sake of being there. This doesn’t mean that you should throw tons of money on marketing thinking that eventually something will work, nor does it mean that you should spend as little as your gut instinct tells you to.

Every business and every industry has its specifics, therefore the right marketing costs have to be based on them along with on what you want and your needs. Only then the return will justify the investment.


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"Ideas are easy. Implementation is hard."

Guy Kawasaki