Updated: Sep 22, 2022
You might be a new marketing director starting a company from scratch or trying to fix a legacy business that has been poorly managed. Have you been putting off the work only your marketing director was meant for? If you've been keeping up with your other departmental tasks and now want to look at how to use your marketing budget more efficiently, we can help.
Once you have an established marketing plan, the next step is to determine your marketing department's budget.
Here's where to start:
Establish Your Marketing Goals
If you've been following this blog for a while, you already know the first thing we recommend in any process: figure out your goals. Starting from any other premise results in tactics or actions based on someone else's goals. And this kind of foundation will not serve you well. A Marketing budget is essential- it's one of the first things that gets slashed when money turns tight, but it is SUCH a critical part of your company. You need a strong foundation for this too - precise numbers are the only way to show results.
Do you want to impact your conversion online or grow your mailing list positively? Would you like to relaunch your brand with an entirely new online strategy, including a redesigned website and a complete inbound marketing plan? You can also include an integrated content strategy, email campaign strategy & lead generation strategy.
Goals will vary, but the first step in setting up a marketing budget is to figure out what you'd like to achieve with it. The more specific, the better. Your marketing budget should be aligned with your goals. If you have a plan for sales or conversions, you need to allocate sufficient funds towards that aspect of your marketing strategy. You can't just emulate another company's marketing strategy because they might have different goals to yours - so it would be impossible for them to know what will work for you too.
Determine the overall annual marketing budget for your company.
Generally, public sector companies would spend 10% of revenue on marketing. But how much of your revenue should go to marketing will depend on what industry you are in, what size your organization is, how recognizable your brand is, and most importantly, what is necessary to grow.
Once you figure out how much money you have to spend, it's time to start budgeting.
Figure out which categories your marketing budget should be for.
This can get tricky, especially if you're working on new marketing strategies while also managing your budget. It's a good idea to reassess any overarching categories that will have a significant impact on your marketing budget this year, as you may need to make changes from the start.
One could start by gathering all the info about their marketing expenses so far. This will depend on how good your information is, but the more you know, the better. For instance, you might need to set some funds aside for TV ads, radio spots, or website placement. Then you'll also need to allocate some money for services like PPC management... That said, some might also want to use the budget for blogging, social media marketing, and content creation. Lastly, certain expenses have to be taken into account when doing sales. Get everything in one place to make your life easier: separated by category.
Then include your new marketing strategies. What categories are they under? And are they creating entirely new categories? You may be wondering if you have to cut back on the budgets for existing items to make room for these new ones.
These are some of the sections you might need to include:
Through old-school marketing, you can reach your audience. But thanks to the digital world, there are many additional ways to engage with potential customers. Outbound marketing is still a popular way to reach your target audience. It might not be as popular as newer forms of PR and content marketing, but it's often the right solution for specific industries and organizations.
When it comes to budgeting, you need to account both for the ad production plus the placement costs.
Branding & Creative
It's clear that the quality of your branding and design department is what enables you to keep marketing looking great. Make sure that your first look is on point.
Be sure to estimate the monthly costs for equipment, software, hardware, and other design features. If you don't use these up each month, that surplus will carry over when you need them. For example: for updates or replacement parts.
Your budget will depend on what you want to get out of a website. If you're already building a site, it will be more of a case-by-case basis. Even if you already have a relatively new website, it's essential to keep an eye on it. You may not be worried about updating it now, but doing another one later can end up costing you a lot.
Don't forget secondary costs such as website hosting, font license renewal, domain renewal, etc.
Content marketing might seem free, but that's not the case. Sure, you're not paying for banners like under "traditional" advertising, but creating and distributing valuable content takes time and effort. Brands need a team of specialists to make it happen.
To keep your videos, you may need to pay for hosting, as well as enter into a contract for distribution. The cost of these services usually increases the more videos you have, so be sure to consider that before signing up.
Traditional PR has been around for years and is vital for companies that are very visible in their marketplace. Brand awareness is a sensitive topic for businesses; after all, it takes so much time & effort to maintain. But using the right tools can help you stay ahead of any potential problems. If there are PR disasters happening, it lets you respond quickly so that it's no longer an issue.
If you are into product marketing, then advertising should be your primary concern. Be aware of product marketing costs before development to be more proactive. Meghan Keaney Anderson from HubSpot says that having conversations with customers helps shape the messaging and make a product successful.
Treating events like a separate expense may help your budget. Events are usually well worth it in the long run, even if they seem to be expensive at first. Make sure to get creative throughout the year, alternating paid speakers with great entertainment. And if you want a big year-end event, consider taking a month off to focus on your big event.
Don't forget that the event will involve a lot of planning and preparation, so it's best to start early. The most significant expense is usually the venue fee, which varies from city to city.
It may be the case that your budget needs to include personnel costs; this would depend on what structure you currently employ. Some companies categorize personnel costs into a separate budget, but others do it by category.
Ensure those employees who need those perks are aware of what is available to them.
Determine Marketing Budget Breakdown for each category
You should allocate a certain amount of money to each category and line item in your marketing budget. This will be the most challenging process, so you should not worry about it until later. The budget allocations will generally vary depending on the objectives you set at the start of the procedure. The percentages to allot to major marketing budget categories should reflect those objectives and be compatible with your business strategy.
Marketing is a tricky business. It's not just about promoting your products and services, but also about understanding your customer's needs and making them feel that they are the most important person to you.
To plan a marketing budget, you should first know what resources you have available. This includes your marketing budget, time, and manpower.
The next step is to determine what kind of marketing campaigns will be executed in the upcoming period. You can decide on a timeline for these campaigns or decide on a general timeframe for all of them. After that, you should identify what kind of resources will be needed for each campaign - this includes people, content, and equipment. Finally, break down the costs associated with each resource type based on the number of hours it will take to execute the campaign.