Digital Marketing Budget Allocation: Tips for Startups

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When you are a startup owner, few things are as important as marketing. After all, no one can sign up for your services or buy your stuff if they don’t know they exist! 

However, this means you will need to figure out how to budget your marketing expenses. To help, we’ve prepared a guide on digital marketing budget allocation: tips for startups! 

Be well aware of your budget limits

The very basis of digital marketing budget allocation is your budget itself. When properly setting up your marketing budget, it is essential to account for your income first.

Digital Marketing Budget Allocation Tips for Startups

Your revenue will dictate how much you can afford to spend monthly marketing. And we recommend that you plan out your budgets monthly, even if you should have a rough yearly budget, too. 

Enough can change in a month, so even if you used to have the most effective strategy for growing your business before the changes, it might no longer be applied appropriately.

Of course, just as important is to always observe the limits of your budget. Going over it can cause a cascade of consequences that threaten the proper running of your business. And doing so can almost always be avoided.

Know that you qualify for some tax relief

Every business worries about taxes, especially when properly planning a budget. The good news is that you qualify to write off some of your expenses! 

There are three major categories where you can qualify for this. First, there’s the money you spend directly to promote your products or services, aka advertising expenses. Second, we have money spent on the equipment you need for the job.

If your startup plans to have its marketing team, acquiring their devices, such as computers and similar, will count for this.

Finally, if you hire professionals to work on your marketing, the cost of their services is typically considered deductible

There are some nuances to this, so you want to double-check everything. Without your legal team, you might want to rely on specialists to properly understand tax relief as a startup.

Consider working with professionals

We mentioned before that hiring professional digital marketers can be deductible from your taxes. 

And you should consider doing it! While it will admittedly cut into your budget, the support professionals can offer more than makes up for it. 

They know the current effective marketing methods and how best to approach planning and are experienced in helping startups get their marketing feet under them. 

In other words, you can avoid wasting many resources in the early days of your marketing drives if you consult them and follow their advice. Otherwise, you might be investing ineffective strategies that are just wasting money. 

A good example is picking out the type of ads you want to use. A less experienced business might opt for ‘regular’ online ads, while experienced businesses will know that pay-per-click ads are much more cost-effective. 

Plan for potential business growth

When you are trying to figure out digital marketing budget allocation, it is important to remember that your business will grow.

Monthly revenue calculation

This is especially pertinent for startups. If you have a good start, your business will develop explosively. This means that you need to leave some leeway in your marketing budget to be ready to take advantage of positive developments. 

Sometimes, when you are garnering attention, it is better to be a bit aggressive with your marketing

This means that you’ll want to pay more in order to get your ads on more sites, or improve your current marketing schemes, to quickly earn that money back.

Of course, you shouldn’t go crazy with it to the point where you dedicate even more money to such projects than originally intended by your budget. That could hurt you if the results don’t pan out as you hope they would.

Research your target audience once more

In order to get a good handle on how much of your budget you want to dedicate to your digital marketing, it is wise to research your target audience.

Some target audiences, like ‘younger’ ones, meaning teens and young adults, prefer to spend their time online on social media.

Social media marketing is one of the cheapest digital marketing options since it comes down to content and a regular posting schedule

On the other hand, ‘older’ audiences all have the preferred sites they like to visit and activities they enjoy online. This means you want to get your ads on those to ensure the greatest possible payback for your investments.

Naturally, this would require a bigger digital marketing budget since it costs money to get ads, put them up, and keep them on the sites of interest.

Do a bit of competitor research

Similarly to our previous point, it can be very helpful to research your competition. Some types of advertising work better for certain businesses

For example, fashion blogs do great when their owners get on social media and share practical examples of what happens when you follow their tips.

On the other hand, moving companies don’t really have many opportunities to use pictures or videos; instead, tips or guide-based content, along with ads, is their way to success. 

Then, there are online store owners or crafters who can take full advantage of affiliate marketing by providing their products for free in exchange for promotion.

This will not only help you decide on what you want your budget to be. It will also provide you with many ideas for what you want your digital marketing to be like.

Pick out what you’ll be doing

In the end, however, it will be up to you to decide what sort of digital marketing you want to do.


The important thing is to make a selection instead of trying out everything. As the marketing experts from Consumer Opinion, a database of different services, like to point out: that will only result in wasting most of your invested money

It is mostly because it is impossible to dedicate enough resources to ensure all of your different marketing drives are of good quality in that scenario. 

You would be stretching your resources thin instead of ensuring they are properly used. And while there will be time to experiment and see what you can make a success, that time is not when your business is still a startup!

Keep track of your digital marketing’s effectiveness

Just as important as knowing exactly what you want to do with your digital marketing budget allocation is having a way to track its effectiveness.

Thankfully, this is relatively easy in digital marketing compared to its ‘traditional’ counterpart. Every digital marketing drive should have its unique backlinks to your site.

And keeping track of the number of leads they are generating will let you know what’s working and what’s not

Even if you want to focus on content and running an SEO-friendly blog, the increase in organic traffic on your site will let you detect the effectiveness of your methods.

Periodically assess your return of investment and adjust your approach

Knowing how your investments are doing will let you do something important: estimate your return of investment. 

Monthly budgeting plan

In other words, you’ll be able to effectively take stock of whether or not it pays off to fund something. Once you have that info, you can simply reroute your funds to the marketing that’s working

And then either drop the lagging marketing methods entirely or work to tweak them, so they perform better. Note that both of these approaches have their own merit.

Dropping deadweight would immediately free up part of your budget, and you’d have a chance to try something new

On the other hand, the whole problem with your current ideas might have been poor execution. It is also often much easier to tinker with something that’s familiar than to figure out a whole new approach.

The beginner fumbling could end up costing you money, after all.

Do not constrain your growth

The final thing to remember about your digital marketing budget allocation is that marketing is one of the main drives of business growth

As such, it is really not in your interest to dedicate minimal resources to it! Even as a startup with little funds, you need to prioritize marketing. If you don’t, you’ll never get the word of your business out there.

And your business dreams might die in their infancy. Of course, you should not be wasteful, and you should look for cheaper alternatives, such as social media marketing, when you are starting out

But it’s still crucial that you have enough funds to make that marketing a success!

The marketing future of your business

By following our digital marketing budget allocation: tips for startups, you’ll be able to secure the future of your business! 

An important thing to remember, however, is that even the best marketing takes some time to generate results. As such, do not be too hasty to reassess the effectiveness of your marketing and make changes when starting out.

About the author 

Peter Keszegh

Most people write this part in the third person but I won't. You're at the right place if you want to start or grow your online business. When I'm not busy scaling up my own or other people' businesses, you'll find me trying out new things and discovering new places. Connect with me on Facebook, just let me know how I can help.

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