The Importance of a Marketing Budget
Let’s start with the part that will make you groan: setting up a budget is work, but it will mean more work, plus lost money if you don’t do upfront planning and set up a budget. So, set down your phone, or mouse, or whatever, and get to work on your marketing plan, then come back and read this.
A clear marketing budget helps you ensure a return on the investment that should convert to higher sales when you do it right. If you plan and allocate now, you’ll see greater gains throughout the year because you’ll have a vision of why and how you’re spending, not just hoping that the money you spend has an outcome.
Aligning With The Cosmos Setting Goals That Align With The Budget
To begin with, the size of your budget is based on your revenue. Typically, around 7-15% is allocated to marketing. Your industry impacts the size of your marketing budget largely because of competition. According to an article by The Wall Street Journal, the top spending industry is consumer package goods (think food to toys), followed by technology and then finance, with manufacturing and energy being among the lowest for spending. Now, here are some examples of how to think about aligning that overall budget to some goals you might have.
- Let’s start with examples of goals; here are a few:
- “I want to expand my social media reach by 25%.”
- “Generate 50 new email subscribers in 1 month.”
- “Use targeted advertising to create a campaign focusing on acquiring new customers.”
- Using the example of expanding social media reach to back into budgetary numbers, you should ask yourself questions like:
- “Do I need additional resources to improve your content today? To create more content? “
- “Should I purchase targeted ads? IF so, on what channel(s)?”
- “Is it time to leverage influencer partnerships?”
- Developing your marketing goals is a part of your overall plan, which you already went away and did, I’m sure of it, and taking that to the next level is when you take your ‘how’ you want to reach those goals and give it some dollar amounts to then do the things you need to do to reach those goals.
Celestial Forces Influencing The Marketing Budget:
Talent, Technology and Time
These things will influence your budget, and they are the parts that impact your allocations to that moon pie that I’ll talk about at the end. They’re the people to do the work, the technology you have to help them do the work, and the time spent engaging with and creating customer interest.
Talent
Your team and company size will impact your ability to allocate resources to the marketing dream. Your team might be in-house, an agency, or a mix of the two. I know a company whose office administrator enjoys the creative outlet of doing social media posts as part of their workload. Other companies might have a dedicated marketing person who creates and edits the content and oversees the website or customer engagement on those social media channels. There are a variety of marketing roles, from copywriting to design, as well as workflow and working with outside teams for things like print or events. As you work out your budget, be sure you have names next to who owns each portion of that marketing budget. Otherwise, it won’t get the attention it needs.
Technology
The technology you have and the technology you need. If you invest wisely, you’ll be able to work faster and smarter; marketing technology, called martech for short, can be expensive. Take a website, for example; you have the domain cost, hosting cost, cost for a designer and maintenance of that site, cost for an online store if you need one, security of said website, and SEO. Account for all the costs because it gets expensive fast, but it’s all important. However, not having the technology needed to get the job done is even more expensive. According to a blog by WebStrategies on November 11, 2022, 59% of companies said that marketing technology is the top investment in digital marketing. That’s because so much goes into digital channels. Another article and this one is your warning bell, was by Martech.org and published on June 7, 2023 (my birthday – side note) about SMB marketers that say they’re stuck with technology that does overlapping functions, there is not getting the technology you need and then having too much of a technology that does ‘it’ in more than one system. Know what you buy and try to be aware of being locked into overlapping subscriptions, or better yet, keep an eye out for apps that consolidate work functions that do not create more need for more integrations.
Time
This is not just in terms of hours in a day; although you do need to make time to make content videos, blogs, and photos, all of it has to get done, but the gist of what I’m more concerned about is efficiency with your time doing those things. I’ll say this with candor to cut to the chase. Don’t waste time trying to be cheap. There, I said it. It’ll cost you in revenue. Your bottom line is actually at stake when it comes to time. Here is an easy example of hours saved by your company being in the right place at the right time.
If someone purchases a product, the right system can automatically send follow-up emails asking how they like it and automatically target them for future ads. This is known as a targeted workflow.
The same is done with social media ads, and it is also great when you spend a day on social content and schedule it for upload rather than going through your various channels to update every 2-3 days. Buying the right technology and setting up proper workflows can impact your time investment and ensure opportunities to engage with your customers.
Making the Marketing Moonpie
Finally, if you want to make 50%,100%, or BLAST OFF 1000% more than you did last year, you have to allocate the funds to reach the audience to sell the product! I talked generally about people and technology above, but let’s get a little more focused now. Here’s a short and high-level list of what falls into a marketing budget:
How much should I allocate to each thing? Aligning the stars is knowing what you plan to do and then allocating the budget accordingly. Now, within the budget, you need to allocate to each of those things. How much to each one depends on all of the factors above, but here’s a start to how that might look; I call it the Marketing Moonpie:
I used to plan and allocate workforce resources for a decade before I began selling and finally marketing the products I had initially used. Planning and budgeting is fun for me. You should see my home budget spreadsheet that I began in 2002, so if you need help, this won’t take long to go through with you, and it’s that investment in time I mentioned earlier! Find Handspring Marketing on Instagram or Facebook to follow my posts, and reach out if you want to learn more.
