Increase your digital spend in 2020 - Digital Marketing expert advises business leaders in Africa

1. Increase your digital spend in 2020 - Digital Marketing expert advices business leaders
in Africa
For ten consecutive years, top marketers were asked how their marketing spend was
expected to change in the upcoming year. Since 2009, marketing budgets remained
relatively consistent or increased compared to the previous year for the majority of
participants.
With no evidence to suggest differently, 2020 marketing budgets are expected to
remain consistent with 2019 levels or increase.
Marketing budgets as a percent of the overall firm budget has remained even more
consistent, as shown in the chart below. On average, marketing budgets made up
11.1% of total company budgets in 2018, with some variation depending on the
industry and who they're marketing to.
Not surprisingly, those companies in the B2C product space allocate the largest
portion of their total budget to marketing, averaging 16%. B2C services increased their
marketing budget share substantially as well in 2019, moving from 9.3% of firm budget
to 14.9%
There is an adage that states “Spend money to make money.” But for African Business
Leaders, this is a particularly challenging mandate to follow when thinking about
annual budgets every year. Now is the time they must take a hard look at their finances
to determine how to spend less and make more.
When times get tough, it’s imperative to remember how important the marketing
portion of your budget is for survival. You should never stop promoting your business,
even when resources end up being more limited than expected.
When your marketing budget is small, you must make smart choices about your
priorities to determine how much money you should devote not only to marketing in
general, but specifically to the critical components of digital marketing.
Why? To succeed in today’s competitive and crowded world, SMBs should consider
digital marketing a top budgeting priority since Digital marketing often offers a greater
return on your investment (ROI) than traditional advertising. Digital marketing
campaigns offer more detailed quantitative measurements of their results.
The benefits of digital marketing are plentiful
Digital marketing opens up a world of advantages over traditional advertising. For
example, digital marketing can offer a higher return on investment than traditional
approaches due to the relatively low cost of online channels like social media, as well
as the ability to quickly adapt your strategy based on data available from Google and
social media platforms.

2. Digital marketing has also been shown to reach the same number of consumers at a
much lower cost when compared to traditional channels.
Consider the additional benefits of digital marketing, too. Not only can you track
specific metrics to provide valuable and specific feedback for each individual
campaign, but any business, no matter the size, can be a strong competitor with a
solid digital marketing strategy.
This is due to the lower cost of online channels, as well as the near immediacy of paid
advertising on search and social media. SMBs can achieve quick boosts to business
through these channels versus the longer waits that often accompany traditional
marketing.
Let’s also not underestimate the viral nature of the internet. In the traditional marketing
world, for example, you have to wait around for your sales flyers to get passed around
between your prospects and customers. With an avenue like social media, share
buttons enable your entire message to be shared quickly.
Most marketers and business owners admit digital still isn’t well integrated with their
overall marketing strategy .. In addition, many local businesses still don’t have mobile-
optimized websites. This can hamper mobile advertising as well as social media
marketing since social media is widely accessed on mobile devices these days.
Worse, Google is now rewarding mobile-optimized sites with higher search rankings,
which can really hurt your results if your site isn’t mobile-friendly.
Allocating digital marketing budget
The next question to answer is how to allocate digital marketing budgets across
channels – and how to spread the online investment across the various online/digital
channels.
Reports from Forrester Research and eMarketer show the estimated allocation of
marketing funds offline vs. online and across the digital channels.
Here are some conclusions from that report:
● In 2018, the average firm was expected to allocate 42% of their marketing
budget to online, and this rate is expected to grow to 45% by 2020
● Search engine marketing will capture the largest share of online spend with
online display (banner ads, online video, etc.) taking the second largest share
● Online video will represent the highest growth category, with the anticipated
investment more than doubling 2016 numbers by 2021

3. ● Social media advertising investments will continue to grow, with a 17%
compound annual growth rate from 2016 to 2021, and is expected to represent
25% of total online spending in 2018.
● Mobile marketing has grown to a point that it’s no longer tracked in the forecast
and it’s presumed to be considered across all channels
● Digital marketing is pacing at an 11% compound annual growth rate between
2016 and 2021 with the biggest growth occurring in online video.
● Investment in paid search, display advertising, social media advertising, online
video advertising and email marketing is predicted to account for 46% of all
advertising by 2021.
How digital marketing funds are ultimately allocated is driven by the nature of the
business, the competitive marketplace, and how target customers behave through the
buying funnel.
A common question I get a lot is “how much do digital marketing agencies charge?”
Or similarly, “how much do digital marketers charge?” As you can imagine, you
generally get what you pay for.
A junior freelance social media marketer may cost you only GHS 2,500 - GHS 5,000
per month. On the opposite end of the scale, senior digital marketing strategists can
cost GHS10,000 plus per month. The prices vary, depending upon the client or project
and the required value.
Another trend is to find an agency that fits your target audience and industry. If you
are marketing services to people with back pains, you will probably want to engage an
agency that specializes in that demographic. Marketing diapers? Well, you will want
an agency that knows how to market to parents.
In 2020, Business leaders should be mindful of who or what agency or marketer they
work with, an agency that charges below $1,000 per month to manage a social media
platform can’t bring you results that will pay salaries and bills. It’s typical of business
leaders to invest little on marketing and expect a higher return, this can’t be applied to
social media.
Investing anything below $1,000 on your social media marketing activities per month
will fetch your vanity metrics like impressions, likes and shares. It’s not surprising many
small businesses in Africa have patronised social media marketing for years but
haven't seen an increase in growth of their sales or business.
Small business owners often are lured into social media marketing that they don’t fully
understand by the large number’s marketers throw around:
● 2.41 billion monthly active users on Facebook

4. ● 500 million daily active users on Instagram
● 321 million monthly active Twitter users
Marketers will tell you that with 2.41 billion people, your future customers have to be
there. But, this is a logical fallacy. There are 1.4 billion people in China and 1.37 billion
people in India. If you run a local yoga studio, none of those numbers matter to you.
Anything you cannot track on social media is a waste. You need to know if your
marketing money is turning into customers or if it is just generating dopamine hits as
your likes and followers climb. Use digital marketing to increase sales and grow your
business
A digital marketing agency that works with all industries most likely can't get valuable
results because of their knowledge spread. No one goes to the dentist if he/she has
an eye problem. Specialized agencies have invested resources to understand it’s
industry’s audience and trends in the industry. Their value comes from their ability to
drill down into a problem with great detail and identify every opportunity for success
within a given campaign.
Still want to work with a general agency because you couldn't find any for your industry,
that’s okay, have a sit down with the team assigned to your company and get them to
understand your business, customers and the goals you want to achieve.
Leaving them to read content on your website or sending a brief won't give them the
knowledge they need to help grow your business with digital marketing.Choose a
specialized digital marketing company , increase your budget and demand quality ROI
that’s geared towards business growth.
The landscape for marketing is broader and more complex. So, you must allocate your
marketing budget judiciously.
There are numerous avenues where you can spend your money. This includes SEO,
Social Media, Branding, Website, Press Release, Email, Print Ads, Events, and more.
Next year, the average firm is expected to spend 41% of their marketing budget to
online sources. Out of which, search engine marketing will take up the most significant
share.Developing an overall strategy is essential.
Is influencer advertising dead?
Influencer advertising was hot the last couple of years, but we think the enthusiasm is
waning. It is still the case that certain industries rely on influencer advertising. The and
electronics and betting industry are such examples.
Influencer advertising may be moderating impact on younger demographics that had
traditionally responded to it. Instagram has proven a reliable forum for young women

5. to model clothing or accessories for others. Those likes can translate into sales for
apparel firms.
Countering that is the millennial generation’s propensity to spend more disposable
income on vacations and “experiences,” rather than on products.
A chatbot revolution?
Because of challenges in finding people to carry out basic customer service functions,
companies are turning to new marketing strategies. With the emergence of marketing
chatbots, clients communicate in a “live chat” through messaging apps.
Take for example, one of the new social media services paragon offers. They recently
worked with a large hotel to develop a “bot” (i.e., robot) that takes a reservation for a
hotel room. It is a rudimentary form of artificial intelligence (AI) that will continue to
improve. This market size will increase as customers ask more questions, and hotel
managers seek to reduce staffing costs.
You could also imagine this working quite well for financial institutions, hospitals, and
schools. Imagine a scenario where you have pain in your left top molar. Rather than
calling the office at 2am, you make the wise decision to go online. You may visit your
dentist’s Facebook page to begin starting a conversation.
There you would click send a Facebook Messenger message and write that you and
have had intense pain for 3 days. A chatbot would instantly respond with empathy.
The bot would ask you if you’d like to schedule an appointment. The bot is smart
enough to negotiate the time slot based on your complication. No more waiting on hold
to speak with a stressed-out scheduling assistant
It’s not quite an age-old question (yet), but it’s just as important. And it’s a popular
thing to be thinking about this time of year moving into Q4: how much should you be
spending on digital marketing?
If you spend too little, your message won’t make it to your target audience. If you spend
too much, you won’t have the budget you need for other important aspects of your
marketing plan.
So how much do you spend, and what do you spend it on? As the new year unfolds,
you need to figure out:
● How much money to spend on digital marketing
● How much of that goes to each tactic – social, video, email, SEM, etc.
● What tools you need, and how much they cost
● Other expenses you need to plan for

6. The Future of Digital Marketing
Irrespective of which business type they represent, global marketers agree that digital
campaigns (of any media type or format) are crucial to their overall promotional efforts.
Here’s a look at the Projected Ad Spend Growth across the globe by media type or
format for the year 2017-2020.
Note: The above figures represent the spending in billions.
Over half of the projected digital ad spend was achieved in 2019. In 2020, the
worldwide digital ad spending will observe a rise of 17.6%, i.e., up to $3,843.96 billion.
However, it will keep on rising till 2023.
In some countries, like the US, digital marketing has become the dominant ad medium.
According to data from Statista, the US with $197.47 billion spends the most on
advertising as compared to other countries.

7. Indonesia and India are home to rapidly increasing digital and mobile users. Thus,
Indonesia is the fastest-growing digital advertising market in the world, followed by
India.
Note: This includes digital ad spend on advertising that appears on the desktop,
laptop, mobile phones, tablets, and other internet-connected devices.
Determining the most significant digital ad sellers of 2019, Google topped the list with
31.1% of total global ad spending. Its spending was worth $103.73 billion.
Followed by it is Facebook with an expenditure of $67.37 billion. Though Amazon is
chipping away the duopoly of Google and Facebook, it still remains a small player at
the global level.

8. Largest Global Digital Ad Sellers of 2019
Note: The above figures represent in billions.
When we talk about industry-wise contribution towards global digital marketing
spending, the retail sector surpasses all.

9. Industry-wise Digital Marketing Ad Spending
The above digital marketing statistics and trends can offer great insights into where
you should plan to spend your time as well as resources.
How much to spend on Digital Marketing in 2019?

10. A company should spend 7-8% of its gross revenue on marketing. For the year 2020,
50% of that budget should be dedicated specifically for digital marketing. However, it
must increase to 55% in 2021.
Any average business spends 35% of its marketing budget on digital campaigns,
which is definitely not enough. To thrive in this continuously growing competition and
stay ahead of the curve, it is crucial to spend half of your marketing budget in digital
marketing.
Let’s consider an example of a company making $2 million revenue. It imparts 7% of
its revenue as its marketing budget, i.e., $140,000. Now, it should invest 50% of this
marketing budget for its digital campaigns, i.e., $70,000. However, several tech-savvy
companies rely heavily on digital marketing and might spend the majority of its
marketing budget on digital strategies.
Now that you are clear of how much you should be spending on digital marketing, let’s
move on to discuss how you should spend this money.
Future Trends that will impact Digital Marketers by 2020
Based on a survey, here are a few upcoming technologies that will take up space in
the present digital marketing scenario.

11. You are now well-aware of the statistics, future trends, and top-notch areas where you
should invest. So, make sure you utilize the realities of your business first and then
decide how much you should spend on digital marketing in 2020 .