How Much Should You Spend on Mobile Marketing?

/ December 9, 2020 | 7 Mins Read

How Much Should You Spend on Mobile Marketing?

Know which are the right mobile marketing strategies and how can you create a mobile marketing budget including them

In this blog, we will discuss how much one should spend on mobile marketing and which factors to look at while deciding a mobile marketing budget.

1. How much do companies spend on marketing optimized for mobile? 

While there is no fixed amount to what marketers around the world are willing to spend on their marketing strategy for mobile, one undeniable fact is, there has been a consistent growth in mobile marketing spend. This is because almost every customer is on mobile, and businesses can't afford to reach out to their prospects and customers. 

According to CMO survey results 2020, "Mobile spend continues to rise. It is expected to grow 73 percent over the next five years, with companies citing social ads the highest spend on mobile. Businesses that sell at least 10 percent online see the most value with mobile, averaging 4.1 percent compared to a 2.7 average for companies that don't sell online. Difficulty tracking customers across the mobile journey is the top challenge for companies."

Read: Top Digital Marketing Stats of 2020 

2. Which are the most profitable marketing tactics? 

The most profitable marketing tactics are the ones that are designed around the people, their needs, and also, more importantly, where they can be reached out to. 

Considering this, the most profitable marketing tactics should be a subset of mobile marketing. That is to say, all rewarding marketing techniques like PPC and social media ads need optimization for mobile phones.

Read: Why Brand Storytelling is the Future of Marketing 

3. How to set a mobile marketing budget? 

Though there's no single rule for everyone! The mobile marketing cost depends from individual to individual. 

Here's a good place to start to set a mobile marketing budget that will help you include the best mobile marketing strategies in a cost-effective manner. 

4 points to look at while setting a marketing budget optimized for mobile 

Here are 4 points to consider by setting a mobile-oriented marketing budget:

a. Look at your ROI  

This is a no-brainer. But, easy, commonsensical things are often overlooked. The first thing to look at while setting a mobile-oriented marketing

The simple basic rule of thumb that you can use as a blanket logic when confused is this: 

Spend around 5% of the total revenue you incur for your mobile marketing endeavors when you're looking for awareness and viability and, spend 10% of your total revenue when you're looking for growth and higher conversions (this holds for all kinds of marketing strategy). This is because all companies will come for their average marketing budget for mobile devices or otherwise. But having said...

Don't forget the following things: 

i. The number of products or services you offer 

Your revenue depends on how many products and services you are selling. This has to affect your cross-device marketing budget as well. So if your company sells multiple products or services, then you should allocate your cross-device marketing budget differently based on the status of each product or service you offer. 

So for each product or service, design a marketing budget by their revenue. To understand this better, read the next point.

ii. How well is each product or service doing? 

If you have multiple products or services, It is very important to know how well you're doing. For instance, if you have a well-established product/service, you may only need to spend around 1% of its total generated revenue on its marketing. But while marketing a new product or the one that's not doing very well, you may have to spend 50% or more of its sales revenue on its marketing. This should help you in easily designing a marketing budget breakdown.

b. Look at what other companies are spending on marketing

Average marketing budget varies a lot by industry, so consider what your competitors might be spending. 

Contrary to popular belief, it is always a good idea to do what the masses are doing. This way, you can save yourself a lot of time, resources, and failure. Having an overview of your competitors' spending on their cross-device marketing endeavors should be a good gold standard to follow. But, make sure your research is thorough. You don't want to get misled by the data from small samples. 

Have a robust in-house marketing research team that relies on trustworthy global research like the one shown below, research by The CMO Survey, and Deloitte Digital. The research lists out average marketing budgets by industry. 

The CMO Survey and Deloitte Digital
Source: The CMO Survey and Deloitte Digital.

You can see how consumer packaged goods, consumer services, software spend a staggering 24 percent. While the transportation, manufacturing, and energy spend only 8 to 4 percent of the total revenue in their marketing endeavors. And we can also safely assume all these average marketing budgets by industry figures would remain the same for these companies' cross-device marketing as all marketing endeavors will be mobile-optimized.

c. How well do you want to deliver a digital customer experience? 

We can't skip talking about mobile applications while talking about cross-device marketing. There are several factors of mobile marketing that play a role in helping businesses deliver an excellent digital customer experience, in which mobile app marketing is the most efficient one.

A mobile app is the easiest and convenient thing for an end-user. This is especially true for B2C businesses. Even if you have a B2B business, having a mobile app and a good mobile app marketing strategy can help you with your marketing more than one way. 

  • It can be a catalog of all your products/services 
  • It can help you send in-app notifications, giving you a chance to attract customers many times
  • It can give you a good image since not all B2B businesses don't have an app 
  • Can help you deliver a good customer experience to your customers

It is also important to note that building a mobile app now is way easier, quicker, and cheaper! 

Read: The Ultimate Guide to Meme Marketing 

d. Look which marketing channels drive maximum revenue 

Cross-device marketing houses under it a lot of different subsets of marketing! And while deciding on marketing costs, it is important to see which marketing channels need more emphasis. This is decided based on how much traffic they bring. 

The more traffic a channel brings, the more you should allocate the marketing budget to it. Here are some of the highly-rewarding marketing channels! 

Pay Per Click or Paid Advertising 

Mobile ads are an excellent way to reach out to your potential customers. Through ad blockers, it has become important for users to create high-quality, non-spammy ads. This is good, as having a neat ad platform works well in favor of all parties. 

Social Media 

Instagram and Facebook have become a massive grabber of customers for many businesses like fashion products, food and beverage, and home decor. Social media harbors a massive active following. Find the right social media channels for you, know where your customers are, and also if they bring in the desired traffic. After considering all these things, you shall allocate your marketing budget for the same. 

Local Search Marketing

Local search marketing has no upfront costs, but it can cost you a moderate amount over time. There are certain free aspects of local search marketing online that you can do, like having a proper Google My Business profile. You'll also require to claim, verify, and optimize listings on Google, Bing, Yahoo!, and Yelp.

To have good digital searchability, you will also need to have SEO done, and SEO activities will require a paid professional! Ranking well matters, especially because now almost all searches are done online through mobile phones! 

Too long, didn't read? Here's a simple marketing budget breakdown

Still, confused as to how should you plan your cross-device marketing budget? Let me help you out to find an average marketing budget for your business. 

First, find the right mobile marketing strategies for you, which could be any marketing strategies that you pick, albeit the only mobile optimized

Then, allocate funds to these strategies according to this basic rule of thumb: 

To maintain current brand awareness and visibility = total revenue x 5% 

To grow your market share = total revenue x10%

4. How have companies adjusted their marketing spending with COVID-19?

The way people have shopped has massively changed post the eruption of coronavirus that has disrupted human lives and the world economy. 

McKinsey's research finding shows the magnitude of change in shopping that consumers display across the world during coronavirus. 

McKinsey's research finding

The column to the right shows how many of these people intend to stick to their new shopping methods in the near and distant future. 

This has made it imperative for business owners and marketers to repurpose their marketing strategies. 

Here are some of the major changes CMOs and CEOs have brought about and have been observed

1. Focus has shifted to the essential

Businesses market only those products that are essential. For instance, a soap company will invest more dollars in running ads for its antigen soap than the one made with rose petals. Since the focus of people is more on hygiene now rather than anything else. 

2. Mobile customer experience is prioritized 

Mobile customer experience was always vital, but the coronavirus pandemic has made it compulsory for businesses to focus on it more. Since everyone is buying things online without leaving their homes, businesses are optimizing mobile to help customers better. For instance, car showrooms are giving virtual tours to customers to help them find the right vehicle. 

This increased significance of mobile phones has made every marketer run mobile-optimized campaigns and invest in tools to support marketing, sales, and support through phones.

Read: How to successfully fund-raise during the pandemic virtually

3. Marketing campaigns have become relevant and sensitive to current times 

Marketers have become smart about the marketing costs. They will not spend their ad and marketing dollars on campaigns that show a group of people in clubs or people shaking hands. Old in-flight campaigns with similar visuals have been halted, and new ones aren't being created. Marketers are wisely spending only on those campaigns that are related to the current situation. 

4. Leading businesses are adapting to being a "socially responsible" brand image  

Businesses of all types want to look socially responsible now. Good PR may not be the ulterior motive of all, and some may genuinely show altruism, but either way, marketers know this and are leveraging it to their full potential.

A socially responsible brand:

  • Helps people in need, and 
  • Also gains people's trust during uncertain times 

Therefore, all marketers are latching onto the concept of being socially responsible.

Read: 10 Best Business Ideas Post Coronavirus 


I hope that this article has helped you understand how to do mobile marketing, which factors to look at while deciding the marketing cost, and how to set a cross-device marketing budget in the first place for your business. 

Shubham is an aspiring clinical psychologist, who also happens to be a blogger for corporates and startups.

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