New Year, New Budget:
How to Effectively Plan Your Marketing for the Year
By Alyssa Rice
As a Marketing Director, VP of Marketing, or Marketing Manager, planning your marketing budget is an important annual process. It can take quite a bit of time to strategize, draft, write, polish, and achieve budget approval.
We want to help you with that. We want to narrow down the steps for you so you can get your budget approved and start your new budget cycle, whether that be quarterly, semi-annual, or annual.
Why do I need a marketing budget?
With all the expenses that a business has, marketing is sometimes overlooked.
Every company, big or small, B2B or B2C, needs a marketing budget. Why? Investing a certain amount up front to acquire a lifetime customer is almost always a worthwhile investment.
If you want your business to last, you need to start creating your marketing budget today.
How many marketing dollars should I allocate?
If your business makes over $5 million per year, the U.S. Small Business Administration recommends 7-8% of your gross revenue should go to your marketing budget.
Obviously not every organization out there makes over $5 million per year. If your company makes below that, it still might be a good idea to deploy a budget of 7-8% or more. Why? Younger companies need to get discovered. Without marketing, how would anyone know about your business? [more info here]
Before using those numbers, there are a few other factors that you should consider:
- The life stage/cycle of your company
- Your competitors
- If your company is a B2B or B2C
- Your current profit margins
- Industry benchmarks
Wes Marsh, BCA Technologies, recommends to:
“Put 70% of your budget into proven marketing channels that give you the best blend of quality leads at a low cost per lead, and then squeeze as much as you can out of it. Put 20% into other channels that still offer quality exposure and lead generation, even if there is less direct attribution (i.e. display, video, etc.). Finally, keep the remaining 10% of your budget available to explore new channels and for testing.”
Whether you’re a B2C specializing in television ads or a B2B focused on LinkedIn ads, make sure to choose your channels based on your audience. However, it may be a good idea to also try out a marketing area you have never done before.
With multiple differing opinions on how much to allocate, we recommend doing what works best for your organization.
What should I spend it on? Types of marketing.
Once you have a budget, the next question is what you should spend it on. Here is a list of what you can put into your marketing budget:
- Email Marketing
- Social Media Marketing
- Inbound Marketing (content creation)
- Influencer Marketing
- Podcast Advertising
- Online Paid Advertisements
- Social Paid Advertisements
- Marketing with Video
- Print Advertising
- Expos and Trade Shows
- Public Relations
- Product Sampling
- Television or Radio Ads
- Education: Free Webinars and Training
- Memberships to Professional Organizations
- Giveaways
- Company Swag
- Domain Names
- Websites
- Graphic Design
- Partner Co-Promotion
- Telemarketing
- SEO Tools
- Web Analytics Tools
This is just a small list of ideas to get you started. You can get creative and think of new ways to spend your marketing money.
How much money should I allocate towards each activity?
Deciding how much money to put towards certain marketing activities can be done by using these steps:
- Decide on a goal for your marketing.
Example: You decide that your #1 marketing goal this year is to double the number of your social media followers. - Calculate out how much the strategy costs. Do your research and see how much it will cost to do this. For example, you find out that a social media content freelancer costs $500 a month to create and post your content for you. Multiply that by 12 (months), and you have your $6,000 budget for that year.
- Repeat this process until you have allocated your total budget, and increased your social media following.
Tip: Leaving an extra buffer amount of money will allow you to be able to have more flexibility throughout the year. If you overspend in one category, the buffer amount can cover it. On the other hand, if you spend too little or just the right amount, you will have extra money at the end of the year to spend on another marketing activity.
How can I keep track of my marketing budget?
Make sure to update your marketing budget weekly or monthly with fresh data so you do not lose track or get behind.
There are many templates online to choose from that your organization can use to track your marketing expenditures. HubSpot has recently shared 8 free marketing budget templates that any company can use.
Tip: It may be important if you find a template where you can track the ROI for each of your marketing activities. If you have good results, this will give you an easy way to request a larger budget next year.
Measuring Your Marketing Results: Attributing New Business
You can spend lots of money marketing your businesses, but a key part of the process is attributing that spending to new customer signups. If you are advertising with Google Ads, on Amazon, or in various paid promotions, you need to know which one of these is performing the best relative to the cost of the promotion. You can do this by tracking the click-throughs from an online property to your signup page. This is normally done with a tracking code that is embedded in an email marketing campaign, web page, online ad, or lead other source. With proper attribution, you can focus on the kinds of leads that work the best for you and your business.
Conclusion
We hope that you can use these tips to make your budgeting aspect of your job easier. From deciding what and what not to spend money on, where to spend it, and how to keep track, we hope you can effectively make a plan. All you have to do now is keep your spending on track!
Resources
Marketing Budgets Explained: Even Your Kids Could Do It
https://www.netatlantic.com/resources/articles/marketing-budgets-explained-even-your-kids-could-do-it
8 Free Marketing Budget Templates
https://blog.hubspot.com/marketing/how-to-manage-marketing-budget-free-budget-templates