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reat marketing is not an accident. It follows an extensive planning process with a carefully drafted strategy, marketing plan, and budget. The latter, the marketing budget, ensures your company’s dollars are efficiently utilized and allocated to marketing efforts with a high ROI. This blog details what costs should be included in the marketing budget and factors to consider when drafting a marketing budget.
The budget should be part of a full marketing plan, which should include a calendar with marketing campaigns, efforts, deadlines, and those responsible for each task. A marketing budget should include a list of costs associated with all marketing efforts, both print and digital, such as:
· Staffing salaries and agency invoices (for producing marketing pieces and executing campaigns)
· Content production
· Ad campaign expenses (print and digital)
· CRM Platform (for scheduling and integrating marketing efforts)
· Sponsorship costs (for events or publications)
· Event expenses
· Website costs (i.e. hosting, editing costs, etc.)
· Technology and equipment costs
Your marketing goals should be SMART: specific, measurable, attainable, relevant, and time-bound. SMART goals lead to a smart allocation of your marketing dollars; every effort added to the marketing calendar (and every dollar spent) is part of reaching those goals.
This is a crucial step in setting a marketing budget---and an often overlooked one. Before you start planning for the future, look at past marketing efforts, determine the amount spent on each campaign, and calculate the ROI of each effort. (Before calculating, decide what metrics are relevant to your business goals.) For example, what was the average CPC of your Google Ads? What is your return on your LinkedIn Ads? (More information on calculating marketing ROI is in this LinkedIn article.)
The answers to these questions should be documented for further analysis. The numbers can help you determine whether to discontinue efforts or decrease or increase funding based on the ROI.
If this exercise hasn’t been done already, it’s time to take stock of all marketing assets. This could include photos, videos, and graphic files. The assets should be organized so they are easily accessible and evaluated to see if they can be used in future marketing efforts. The latter option is a viable way to lower marketing costs, if needed; these files can be repurposed or re-edited so your audience thinks it is fresh and new.
Your target audience factors into your marketing budget because it determines where you should place your dollars. For example, if you are a B2B company, you should consider platforms where your target audience frequents, such as trade publications, search engines, and LinkedIn.
This exercise should not produce generic results; instead, you should research your buyer personas carefully so you have a very specific idea of who you are marketing to. This, in turn, leads to an efficient allocation of your company’s time and dollars.
Your marketing is a means to meet your company’s goals, but it is also a means to surpass your competitors. As such, you should plan on researching your competition to see what means they are using and where they are allocating their marketing budget dollars. It also involves a careful analysis of your industry and the current business landscape. The result of your research should not “copy cat” efforts; instead this is just a review to ensure that you are reaching your target audience, in touch with your current market, and exceeding your competition’s efforts.
A marketing budget is a critical component of your company’s financial plan. A well-defined marketing budget is the result of a thorough assessment of a company's marketing capabilities (both current and past), industry analysis, and the identification of target audiences. It is a dynamic tool that evolves with changing market conditions and business priorities, ensuring that resources are optimally utilized to maximize the return on investment.
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