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How Much to Spend Online Marketing [Infographic]

Earlier in the year, we conducted a survey of website owners and managers to understand their online business. We wanted to learn something about the real issues that online business owners face when making decisions about their online advertising budget. Is social media marketing really free? Is it an important investment? The feedback may surprise you! As much as 35% of website owners are not spending on any marketing or advertising at all.

I have made a few assumptions in deriving this research, and for those academics who want to qualify the number crunching, please write a comment for me, and I’ll see if I can follow up personally. Following is an infographic showing some key results. The survey is still open, so we can take another look later on to compare differences in people’s spending budgets in 2013.

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small business spend online advertising
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Survey Results Spend on Online Marketing by InMotion Hosting is licensed under a Creative Commons Attribution 3.0 Unported License.
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Demographics

We had 147 responders in June 2012. Our responders were prompted by our newsletters, and some social media feeds. The majority of the responders are therefore from our own customer base. Responders were divided into the amount they invested on their website hosting. Based on what they spend on web hosting, we have grouped the respondents by the type of hosting technology they use.

The ratios of groups sizes to one another seem to match patterns we see in our existing customer base. For example, more than half of the respondents are on a shared hosting plan. A smaller proportion of the respondents use Virtual Private Servers. Finally the smallest group spend on the dedicated servers.

147 respondents is too small a sample to give an accurate assessment of spending on online advertising. However, it is a significant pool to start to see spending habits and determine the focus for the next set of research. Let’s get started!

Website owner community: What portion of website owners are currently marketing?

Out of all the respondents that showed an interest in marketing costs, only 65% of them reported they actually put their hands in their pocket and spent money on promoting themselves. The average spend amongst those that did budget for online promotion was a surprisingly meager $202 per month.

We segregated spending into three different categories.

  • Spending on online advertising This includes all forms of paid advertising including Facebook paid ads, Google Adwords and Display Networks.
  • Spending on SEO – or Search Engine Optimization. This includes text-brokering, paying for press releases, link building, CRM subscriptions and analysis tools.
  • Spending on Social Media. This includes monthly subscriptions to CRMs for social media management, automation and scheduled posts tools, multiple account management tools.

 

How much do website owners spend on online advertising?

# respondents Web Hosting Totals Facebook ads SERPs Ads Display Network
147 All WebHosting Plans $12,730 $1,370 $7,070 $4,290
82 Shared Hosting $3,920 $650 $1,810 $1,460
50 VPS Hosting $6,550 $660 $3,600 $2,290
15 Dedicated Hosting $2,260 $60 $60 $540
Creative Commons License
Survey Results Small Business Spend on Advertising by @JulianaPayson is licensed under a Creative Commons Attribution 3.0 Unported License.

Across 147 respondents,  $12,730 a month is being poured into advertising. More than half of this money is going directly into Google Adwords Search Advertising. Of course dividing these numbers up into average spending across each web hosting group reveals a general trend that can be seen in the infographic. The more hosting horsepower individuals are investing in, the more advertising dollars they are spending.

What is not shown on the graph though is something harder to explain: That out of our sample of respondents the biggest pool of spending are those in VPS hosting, attempting to draw in their traffic mainly through Search advertising.
One insight the survey results seem to offer, is that as websites progress up in resource requirements, advertising focus moves away from paid search listings, to banner advertising on display networks.

How much do website owners spend on SEO?

# respondents Web Hosting Totals SEO Tools PR SPIN CRM
147 All WebHosting Plans $5,390 $2,940 $1,110 $1,340
82 Shared Hosting $2,300 $1,290 $460 $550
50 VPS Hosting $1,960 $1,120 $450 $390
15 Dedicated Hosting $1,130 $530 $200 $400
Creative Commons License
Survey Results How Much Spending on SEO by @JulianaPayson is licensed under a Creative Commons Attribution 3.0 Unported License.

SEO spending is hard for people to quantify, so the questions were designed to prompt users into thinking about their spending habits.

Classic SEO spending comprises of subscriptions to SEOmoz analysis tools, and a lot of time backlinking and site restructuring. This represents the “SEO Tools” column. Next I have “PR Spin”, prompting individuals to admit to budgeting for text-brokering, press releases, or maybe even paid link-building services. Finally, and I think this is the most important for modern SEO, is the investment in CRM suites like Buzzstream for tracking those new webmaster to webmaster relationships and general business development.

The spending reports are not surprising. The biggest pool of spending is represented by those using Shared Hosting. These individuals are competing with other thousands of similar more established businesses. As the business becomes more steadfast and require more resources due to high traffic, they focus on more on embedding themselves into the web ecosystem using CRMs.

 

How much do website owners spend on Social Media?

# respondents Web Hosting Totals SMM Suites automation web 2.0 plugins
147 All WebHosting Plans $1,290 $430 $500 $360
82 Shared Hosting $440 $180 $150 $110
50 VPS Hosting $840 $240 $350 $250
15 Dedicated Hosting $10 $10 0 0
Creative Commons License
Survey Results Business Spend on Social Media by @JulianaPayson is licensed under a Creative Commons Attribution 3.0 Unported License.

Overall, Social Media tools receive less monetary commitment than any other form of online promotion. Even if you add in spending on Facebook promotions at an additional $1,370 across the board for all website groups, this total of $2,660 per month across our entire respondent pool represents a small amount of commitment.

This result was surprising. The importance of social media engagement for businesses is constantly over-hyped, yet here we have results that show it is the smallest portion of spending across the board by all online business.

Perhaps the general public opinion is that social media is free, and therefore should not be invested in. Our survey attempted to draw out any hours used and not accounted for by asking respondents what hours they spent doing online activities. There was simply not enough hours tallied up to draw any meaningful conclusion. There were not enough hours in any one category of activity to determine if site owners focus more on one job than another in marketing their websites.

One consistent fact across all responses, was that there is an even distribution of spending among all website owners. An average spend of less than $10 per person per month and no significant big spenders makes the social media marketing scene a steady outflow, but not an investment spend.

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