How To Create a Budget For Marketing (2024)
A marketing budget is a crucial component for any business looking to promote its products or services and reach its target audience. A budget allows for effective planning, resource allocation, and measurement of marketing efforts. A lack of a budget can hinder marketing goals and result in overspending.
Consider the following questions when creating a marketing budget:
- What are my business goals?
- Who is my target audience?
- What are the current industry trends?
- What are my competitors doing?
- What marketing tools can I use?
By answering these questions in an exercise you’ll start to get a general idea of what you’ll need to ultimately reach your intended goals.
How To Create A Marketing Budget
Follow these easy steps to create a marketing budget for your business this year.
1. Determine Your Marketing Goals
Your marketing objectives should align with your overall business goals. For example, if your business goal is to increase sales, your marketing objective might be to generate leads or drive website traffic. By defining your marketing objectives, you’ll be able to measure the success of your marketing efforts and make data-driven decisions about your marketing budget.
2. Identify Your Target Audience
Before you start creating your marketing budget, it’s important to have a clear understanding of who you’re trying to reach with your marketing messages. This will help you determine the best marketing channels to reach your target audience and create marketing materials that resonate with them.
3. Analyze Your Current Marketing Spend
This will help you identify areas where you’re already succeeding and areas where you need to improve. For example, you might find that your social media presence is strong, but your email marketing efforts are lacking. This information can inform future budget allocation and improve marketing efforts.
4. Allocate Your Budget
Allocating your budget means determining how much money you want to spend on each marketing channel. To do this, you need to consider your goals and target audience, as well as the costs associated with each channel.
For example, let’s say your marketing budget is $100,000 and your goal is to increase brand awareness. You’ve identified your target audience as young professionals and you plan to use a mix of advertising, events, content marketing, and public relations.
Here’s how you might allocate your marketing budget:
- Advertising: $30,000. This could include social media ads, search engine ads, and display ads targeted to young professionals.
- Events: $20,000. This could include sponsoring events, hosting events, or exhibiting at trade shows targeted to young professionals.
- Content marketing: $30,000. This could include producing blog posts, e-books, infographics, and other content that is relevant and valuable to young professionals.
- Public relations: $20,000. This could include securing media coverage, creating press releases, and building relationships with influencers in the young professional community.
This allocation is just one example, and the exact amounts will depend on your specific goals and target audience. You may need to adjust your budget as you go, based on the results of your marketing efforts and changes in the market.
In general, small businesses typically allocate 7-8% of their total revenue towards marketing. However, the exact percentage can vary depending on factors such as the size of the business, industry, competition, and target audience.
Some businesses may need to allocate a higher percentage of their budget towards marketing in order to stay competitive, while others may be able to allocate less. It’s important to find the right balance that works for your business and helps you achieve your marketing goals.
5. Monitor And Adjust Your Spending
Monitoring and adjusting your marketing budget is key to making sure you’re getting the best results from your marketing efforts. To do this, it’s important to track and measure how your marketing is performing regularly. This way, you can see what’s working and what’s not, and make informed decisions about where to allocate your budget in the future.
There are software tools that can help you monitor and track your marketing spend. For example, Google Analytics provides a wealth of information about your website traffic, conversion rates, and online advertising campaign performance. You can use this information to understand which channels are working best for you and adjust your budget accordingly.
Another option is to use a marketing planning software tool like Asana, Trello, or Monday Marketer. These tools help you keep track of your marketing projects and budgets in one place, and make it easy for you and your team to stay on track and on budget.
It’s essential to know your spend because it helps you make informed decisions about where to allocate your budget. If you’re not tracking your spending, you may end up overspending on channels that aren’t effective or underfunding channels that are working well. By monitoring your spending you can make sure you’re getting the most value from your marketing budget and reaching your goals.
6. Create A Contingency Fund
Setting aside contingency funds is an important step in creating a marketing budget. This means setting aside a portion of your budget to cover unexpected expenses that may arise during your marketing efforts.
For example, you may need to make changes to your advertising campaign if it’s not performing as well as you expected, or you may need to respond to changes in the market or shifts in your target audience’s behavior. Having a contingency fund in place can help you respond quickly and effectively to these changes, without having to scramble for additional funds.
It’s recommended to set aside 10-20% of your total marketing budget for contingencies. This gives you enough flexibility to respond to unexpected expenses without completely derailing your budget.
It’s important to note that contingency funds should not be used to cover regular expenses or to fund new initiatives. Instead, they should be reserved for unexpected expenses that arise during the course of your marketing efforts. Having a contingency fund in place can help you respond to changes in the market and keep your marketing efforts on track, even when unexpected expenses arise.
7. Revisit And Revise Your Marketing Budget
Revise your marketing budget regularly to align with current goals and account for market changes. This ensures effective resource allocation and alignment with current goals. Consider the factors mentioned above like marketing goals, target audience, and previous marketing results when revising. This can also identify areas for optimization in spending.
Marketing Budget Example
Here is an example of a marketing budget for a typical startup:
Advertising: $50,000
- This budget will be used to run online advertising campaigns on platforms such as Google Ads, Facebook Ads, and LinkedIn Ads.
- The advertising budget will be divided between various campaigns, targeting different segments of the target audience.
Content Marketing: $25,000
- This budget will be used to create and distribute high-quality blog articles, whitepapers, videos, and other types of content.
- The content will be distributed through the company’s blog, social media channels, email marketing, and other channels to reach the target audience.
Public Relations: $15,000
- This budget will be used to improve the company’s visibility and reputation through media outreach and press releases.
- The PR budget will also be used to secure speaking opportunities for the company’s leadership at industry events and conferences.
Events: $10,000
- This budget will be used to participate in and host industry events and conferences.
- This includes the cost of event tickets, booth rentals, and marketing materials.
- Alternatively, you can host multiple virtual events for the same budget.
Contingency Fund: $15,000
- This budget is set aside to cover unexpected expenses that may arise during the course of the marketing efforts.
Total Marketing Budget: $100,000 + $15,000 (contingency)
Summary
To create a marketing budget, determine your marketing goals and target audience, allocate your budget to various marketing channels based on their effectiveness, regularly monitor and adjust your spending, set aside a contingency fund, and revisit and revise your budget regularly to align with current goals and market changes. Having a clear and effective marketing budget can help you maximize your marketing efforts and achieve your desired results.
