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If You’re Not Reinvesting Profits Back Into Your Digital Marketing, Now is the Time!

If you’re a small to medium business owner, I have a big question for you. How often are you reinvesting profits back into your business? And even more importantly, how much are you reinvesting?

According to a report from Forrester Research, you should currently be spending an average of 30% of your yearly turnover on digital marketing, with this broken down to 15% on SEO/PPC, and 15% on social marketing (according to various other sources).

Investing into your company is absolutely vital, especially in this ever-growing digital world. As our CEO Ben Bradshaw has said many times, “If you’re not online, you’re missing out.” No matter how great your product or service is, if you aren’t keeping your brand in the forefront of people’s minds – through online advertising and marketing – you’re unlikely to see continued growth.

While it is understandable that many small businesses would be tempted to pocket their earnings rather than to reinvest profits, take the advice of Kyle Taylor, Founder of ‘The Penny Hoarder.’ After dropping out of college and racking up a $30K student debt, Taylor now runs a multi-million dollar website. How did he do it? Through reinvesting.

In an article for Entrepreneur, he writes:

“One of your big goals is likely to increase how much you earn, but you’ll earn the same amount year after year – or only make small, incremental increases – if you don’t put a portion of what you earn back into the business.

“Because I’ve followed the philosophy of reinvesting half of what I earn, my business has grown exponentially over the last few years — far faster than it would’ve if I’d pocketed all the profits each year.”

Caption: A snapshot of Taylor’s company growth and profit reinvestment

Caption: A snapshot of Taylor’s company growth and profit reinvestment

So what sort of figures should you be investing? According to our Digital Solutions Consultant Cameron Asher, it makes sense to invest 30% of your earnings back into your business. Taking into consideration the 15% SEO/PPC & social media recommendations, a business with a turnover of $160,000 per year should be spending $24,000 on their SEO & PPC. 

To put it in perspective, on one of our average SponsoredLinX packages, the average a small business should be spending is:

$385.66 on monthly management
$1099 on monthly SEO spend
(Yearly this equates to $23,816)

As you can see, it’s fairly easy – and quite affordable – to reinvest in your business by spreading your revenue between SEO, PPC, social media and digital marketing.

With digital marketing revenue set to rise to 35% by 2019, the importance of digital marketing has never been more clear!

Need help with managing your SEO & PPC spend? Don’t waste time and money on tricky strategies – call our friendly experts today on 1300 859 600.